GameStop pares early gains after saying it plans to elect Reddit favorite Ryan Cohen as chairman

GameStop pares early gains after saying it plans to elect Reddit favorite Ryan Cohen as chairman
Courtesy of Ryan Cohen; Chewy; GameStop; Olly Curtis/Future Publishing via Getty Images; Reddit; Samantha Lee/Insider
  • GameStop rose then fell after the company said it intends to elect Ryan Cohen as chairman.
  • The Chewy founder has been leading the efforts to turn GameStop into an online force.
  • GameStop said it intends to nominate five other people to its board, including a private equity executive.

GameStop shares rose on Thursday after the company announced it intends to elect activist investor Ryan Cohen as chairman, but quickly pared their gains.

The video-game retailer also nominated five other people for the board - including private equity executive Larry Cheng and Kraft Heinz senior vice president Yang Xu - as it tries to reinvent itself as an e-commerce force.

GameStop's board also appointed one of those nominees, Jim Grube, to serve on the strategic planning committee. Grube was chief financial officer at Chewy, the online pet supply retailer founded by Cohen.
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Voting on the board nominees will take place at the company's annual meeting of stockholders on June 9, the company said in a statement before markets opened.

Cohen has become an increasingly powerful figure at GameStop in recent months. The billionaire's RC Ventures first invested in GameStop in September 2020, and is one of the biggest shareholders.

GameStop stock opened around 4% higher but quickly fell back. It stood 0.44% lower at $177.38 at 10.10 a.m. ET.
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Cohen was first appointed to the board in January, which analysts have cited as one of the catalysts for the dramatic rise in the stock which captured the markets' attention at the start of the year.

He has since seized control of the company's strategy, hiring numerous executives with backgrounds in online retailing in an effort to turn the flagging company around. On Monday, GameStop said it plans to sell as many as 3.5 million shares to raise up to $1 billion to help fund Cohen's transformation plans.
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Separately on Monday, GameStop said preliminary global sales during the first nine weeks of fiscal 2021 increased by about 11% from the period a year earlier.

Read more: Goldman Sachs handpicks 40 stocks that will enjoy bigger earnings growth than Wall Street expects in 2021

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