(Bloomberg) – GameStop Corp. soared after announcing plans to elect Ryan Cohen as the next president, further boosting the activist investor’s influence at the video game retailer.
Kurtis Wolf resigned on April 5, GameStop said in a filing Thursday. The company said the resignation was not the result of a disagreement over operations, policies or practices.
Cohen will run for office at the annual meeting on June 9, GameStop said in a statement. It plans to pay all directors entirely in equity, while reducing individual director compensation by approximately 28%.
Shares of GameStop rose 4.4% to $ 185.88 in New York City before falling. GameStop was on a three-day losing streak sparked by the company’s plans to sell up to $ 1 billion in additional shares. The stock has been on a wild ride, led by Reddit, growing ninefold this year.
Trading in GameStop, like most preferred stocks by traders using social platforms like Reddit, has collapsed in the past three weeks, with amateur investors focusing elsewhere. The stock has been hit by bouts of volatility since January, when Cohen began shaking up the company’s operations and retail traders arguing with short sellers.
As part of an overhaul of the business led by Cohen, the company hired new executives, including a director of growth and technology. She added technological background to her team to help the company move away from its physical activities.
GameStop, based in the Dallas suburb of Grapevine, Texas, has suffered from the video game industry’s shift to online distribution. As gamers increasingly download or order software and hardware online, there is less reason to visit a physical store. The company reported disappointing fourth quarter results last month.
In addition to selecting Cohen as chairman, GameStop plans to appoint two new members of the board: Larry Cheng, managing partner of Volition Capital and the first investor in pet supplies retailer Chewy, where Cohen made his name. ; and Yang Xu, senior vice president of global finance and treasury at Kraft Heinz Co.
Alan Attal and Jim Grube, Cohen’s allies who joined the board with him in January, and chief executive officer George Sherman, are to be reappointed.
(Updates with shares in fourth paragraph.)
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