What Happened:
Shares of video game retailer GameStop (NYSE:GME) jumped 6.41% in the morning session after the company announced the appointment of Ryan Cohen as President, Chief Executive Officer and Chairman, effective immediately. While currently serving as Executive Chairman, Mr. Cohen will step down from this role upon assuming the position of Chairman.
Cohen founded the e-commerce pet company Chewy in 2011 and served as Chewy's CEO until 2018. Following the sale of Chewy in 2017 and its IPO in 2019, Cohen disclosed a near 10% stake in GameStop in September 2020, making him the company's biggest individual investor. He then joined the board in January 2021 and has been credited with some major changes such as a few major executive replacements. After the initial pop the shares cooled down to $17.49, up 1.97% from previous close.
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What is the market telling us:
GameStop's shares are very volatile and over the last year have had 53 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
GameStop is up 1.91% since the beginning of the year, but at $17.49 per share it is still trading 38.4% below its 52-week high of $28.39 from October 2022. Investors who bought $1,000 worth of GameStop's shares 5 years ago would now be looking at an investment worth $4,590.
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