what happened
Shares of GameStop (NYSE: GME) rose 27% on Tuesday, boosting the stock’s sharp rise this week.
Approximately
GameStop said Monday that its board has formed a “Committee on Strategic Planning and Capital Allocation” to accelerate the digital transformation. The committee is led by Tough (NYSE: CHWY) founder and former CEO Ryan Cohen, who is one of GameStop’s largest shareholders.
GameStop’s share price rises again. Image Source: Getty Images.
The committee is working to strengthen the digital capabilities of GameStop. E-commerce has become an important part of the business as the sales of traditional game chips have largely made way for digital downloads over the past few years.
GameStop has appointed several executives to address its technology focus initiatives. It is also looking for a new chief financial officer following Jim Bell’s resignation in February.
Now what
GameStop has long been looking for ways to adapt its operations to changing consumer preferences. Downloading digital games is an existential threat to its high-margin retail stores and game industry, and GameStop has struggled to overcome the decline in sales in these areas.
Cohen joined GameStop’s board in January, with the goal of improving the online retailer’s capabilities. “We are excited to bring our customer-obsessed mindset and technology experience to GameStop and its strategic assets,” Cohen said in a press release announcing his board appointment.
Cohen’s appointment helped explode a brief push on GameStop that caused its share price to rise more than 15 times before bouncing off and turning its stock off. Its success in turning the retailer into a legitimate e-commerce player will go a long way in determining whether this latest rally in GameStop’s shares is sustainable.
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