GameStop shares soar on strong holiday sales, new board members

GameStop shares soar on strong holiday sales, new board members

GameStop’s
stock
is
on
a
multi-day
winning
streak.

After
surging
58
percent
to
close
at
$31.45
on
Wednesday,
shares
of
the
video-game
retailer
are
up
by
more
than
8
percent
in
early
trading
on
Thursday
after
the
company
reported
strong
holiday
sales
and
added
three
activist
investors
to
its
board.

Changes
have
been
coming
fast
at
the
Grapevine,
Texas-based
company,
which
had
shaken
up
the
board
earlier
last
year
after
the
company
reported
one
of
the
worst
holiday
seasons
in
a
decade,
with
sales
declining
by
25
percent.

Since
then,
Chewy.com
founder
Ryan
Cohen
took
a
9-percent
stake
in
GameStop
in
August
buoying
investors’
confidence
in
the
37-year-old
retail
chain. 

This
week,
Cohen’s
investment
firm
RC
Ventures
struck
an
agreement
with
GameStop
to
add
three
new
members

Cohen
and
two
other
former
Chewy.com
executives

to
the
10-member
board.

The
new
directors
bring
“deep
expertise
in
e-commerce,
online
marketing,
finance
and
strategic
planning
to
GameStop,”
the
company
said
in
a
statement.

“People
took
the
board
changes
seriously,”
said
Wedbush
analyst
Michael
Pachter,
and
they
“are
giving
Ryan
Cohen
a
lot
of
credit
for
the
potential
to
expand
GameStop’s
market
via
ecommerce.”

But
the
stars
have
already
been
aligning
for
the
company
with
the
debut
of
three
new
gaming
consoles
from
Nintendo,
Microsoft
and
Sony
this
holiday
season,
which
contributed
to
a
4.8
percent
increase
in
comparable
store
sales
in
November
and
December
and
“unprecedented
demand,”
the
company
said.

This
demand
is
expected
to
“drive
sales
well
into
2021”
the
company
added.

The
company’s
ability
to
capitalize
on
the
consoles
is
only
enhanced
by
the
expertise
of
the
new
directors,
Jefferies
analyst
Stephanie
Wissink
wrote
in
a
research
note.

“The
timing
allows
[GameStop]
to
make
big,
bold
moves
under
the
cover
of
a
robust
next-gen
console
cycle
launch,”
Wissink
wrote,
“where
demand
continues
to
outstrip
supply
and
will
likely
do
so
through
2021.”

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