(Bloomberg) – GameStop Corp. climbed after saying it plans to elect Ryan Cohen as the next chairman, strengthening the activist investor’s influence at the video game store.
Kurtis Wolf resigned April 5, GameStop said in a filing Thursday. The company said the dismissal was not the result of a disagreement over operations, policies, or practices.
Cohen will stand for election at its annual meeting on June 9, GameStop said in a statement. It intends to pay out all directors in full equity while reducing individual directors’ compensation by approximately 28%.
GameStop shares were up a whopping 4.4% to $ 185.88 in New York trading before pulling out. GameStop had suffered losses for three days due to a business plan to sell as much as $ 1 billion in additional stock. The stock has been on a wild Reddit-powered ride and is up nine-fold this year.
Trading on GameStop, as with most stocks favored by traders using social platforms like Reddit, has become buzzing over the past three weeks as amateur investors turned their attention elsewhere. The stock has been hit by periods of volatility since January, when Cohen began to shake up the business and retailers spar with short sellers.
As part of a corporate overhaul led by Cohen, the company has hired new executives, including a chief officer for growth and technology. It has added technology experience to its team to help the company get away from its physical activities.
Based in Grapevine, Texas, a suburb of Dallas, GameStop has suffered from the video game industry’s shift to online distribution. With more and more gamers downloading or ordering software and gear online, there is less reason to go to a brick-and-mortar store. The company reported disappointing fourth-quarter results last month.
In addition to selecting Cohen as chairman, GameStop plans to nominate two new board members: Larry Cheng, managing partner of Volition Capital and the first investor in the pet store Chewy, where Cohen made a name; and Yang Xu, senior vice president of global finance and treasury at Kraft Heinz Co.
Up for reappointment are Alan Attal and Jim Grube, Cohen’s allies who joined the board with him in January, and Chief Executive Officer George Sherman.
(Updates with shares in fourth paragraph.)
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