Activist Investor's Appointment Offers Hope for GameStop's Revival
GameStop (ticker: GME) saw a sharp rise in its stock on Thursday following the election of Ryan Cohen as its new president and chief executive. This move marks a significant bet on the activist investor's ability to revitalize the struggling videogame retailer.
In premarket trading, GameStop shares surged by 9.8% to reach $18.83. The company announced that its board had unanimously elected Cohen to assume the roles of CEO and president, effective immediately. Notably, Cohen will not receive any compensation for taking on these responsibilities.
Cohen had previously served as the executive chairman of GameStop since June. His appointment came after the removal of former CEO Matt Furlong, who had been focused on implementing a cost-cutting strategy.
Following Cohen's arrival, the company reported a narrower quarterly loss, which positively impacted the stock. However, it is crucial to note that GameStop's share prices are still far from the extraordinary peak experienced during the meme-stock frenzy earlier this year.
Currently, only a handful of analysts continue to cover GameStop. Wedbush's Michael Pachter, for instance, maintains an Underperform rating and a target price of $6 for the stock. In June, Pachter expressed concerns about GameStop's ability to swiftly reduce costs and overcome its financial losses.