GameStop's stock price saw another jump after the retail company announced that Chewy co-founder Ryan Cohen would become its chairman after GameStop's annual shareholder meeting. GameStop's stock jumped by nearly 4% during early trading on Thursday after the company formally announced that Ryan Cohen, the co-founder of the online retailer Chewy, would become its new chairman later this year. Cohen's investor group RC Ventures invested in GameStop last year and has pushed a transformation of sorts within the company, with GameStop shedding unprofitable locations within malls and pivoting to focus more on online sales.
In addition to Cohen becoming chairman of the board, GameStop has also nominated Larry Cheng, the first investor in Chewy. Several other executives from Chewy have joined GameStop in an attempt to hasten its transformation from a brick and mortar retailer to an "omni-channel" retailer that can serve customers in both the online and physical space. Several board members have also announced that they are leaving the company, including former Nintendo of America head Reggie Fils-Aime.
Cohen's initial investment in GameStop sparked one of the major financial stories of 2021, as hedge funds battled against individual investors on bets as to whether Cohen's moves would turn the company around. While hedge funds bet heavily against GameStop by shorting its stock, individual investors largely organized on Reddit created a market phenomenon known as a short squeeze, driving up demand in GameStop's stock price and delivering massive losses to the funds. GameStop's price has stabilized somewhat over the past month, but still remains up around 900% over its stock price at the beginning of the year.
GameStop also recently announced that it would sell some of its own stock to potentially raise hundreds of millions of dollars, thus taking advantage of its current high stock price value. Adding all that money to its balance sheet would provide the company with a financial shot in the arm to help with its planned shift to more online sales.