The unlikely surge behind Texas-based GameStop continues with a vengeance on Monday after the struggling brick-and-mortar doubled-down on its ecommerce push by choosing billionaire investor, Ryan Cohen, to head a committee charged with accelerating the company's transformation.
- Chaired by Cohen, the former CEO and cofounder of pet supplies retailer Chewy,, the three-person committee will be tasked with evaluating nearly every aspect of the firm including operations, digital capabilities and its organizational footprint.
- The two other committee members are Alan Attal, a former Chewy executive who joined GameStop's board alongside Cohen in January, and Hestia Capital Founder Kurt Wolf, an activist shareholder and board member since June who (like Cohen) has blasted former directors for the firm's poor financial performance.
- Traders on Reddit's WallStreetBets forum–who led a charge to pump up GameStop prices in January–rejoiced at the news, which garnered 12,000 upvotes on the site, with one poster pondering, "Am I the only one who reads Cohen = CEO in near future from that piece of information?"
- But not everyone's bullish: "GameStop's ecommerce options are still enormously limited given games are now primarily distributed directly by publishers to users," Vital Knowledge Media Founder Adam Crisafulli said in a Monday note, adding that Cohen's involvement–even before the announcement–was already considered to be one of the firm's biggest bullish drivers.
- As of 12:25 p.m. Eastern Monday, GameStop shares were surging 35%, representing about $3.4 billion in added market value; current prices of about $182 are about 13 times more than the average analyst price target of $13.44, according to Bloomberg.
- A representative for Cohen, who Forbes estimates is worth about $1.9 billion, did not immediately respond to a request for comment.
"Retail investors are increasingly living in the moment, exacerbating already high market volatility through frenzied activity in meme stocks," Julian Emanuel, chief equity and derivatives strategist of institutional trading company BTIG, said in a Monday note, specifically referencing GameStop, AMC and Rocket Companies.
It's still unclear how long GameStop shares can retain their stratospheric highs, but their latest rally has gone on for two weeks. Recently, skyrocketing firms like Rocket Companies prove the meme-stock phenomenon is far from a one-off occurrence. Some experts even think the moves could become routine. Oanda Senior Market Analyst Edward Moya said in a late-February note that institutional money is partly behind GameStop's recent upswing, adding that heightened options activity continues to drive volatility in meme stocks. Meanwhile, GameStop's transformation seems far from over. In addition to the newly formed committee, GameStop last month tapped one of Cohen's Chewy executives, Kelli Durkin, as vice president of customer care, and Amazon Web Services veteran Matt Francis as chief technology officer.
GameStop shares are up nearly 1,000% this year, but the stock is still down about 46% from a closing high in late January–at the peak of meme stock mania. Rocket Companies, which was pulled into the action last week, has tanked about 38% from a high on March 2.