June 12, 2020
GameStop investors Hestia Capital Partners and Permit Capital Enterprise Fund, who own about 7.3% of the video game retailer’s outstanding shares, June 12 announced that, based on preliminary voting results, the investor group’s two nominees, Paul J. Evans and Kurtis J. Wolf, have been elected to the retailer’s board of directors.
John Broderick, partner with Permit, said the independent nominees to the board will prove complementary to those already on the board.
“Together, we believe these individuals will help GameStop realize its significant potential in the gaming industry,” Broderick said.
In March, GameStop CEO George Sherman announced the appointment of three new members to its board, including Reginald Fils-Aimé, William Simon and James Symancyk.
The activist groups believe GameStop should add stockholder-aligned directors who have the financial acumen, turnaround experience and stockholder perspective to drive “real change” at GameStop.
The board changes come as GameStop faces increased challenges in a retail market undermined by digital streaming and lack of new-generation hardware. The chain lost $130 million in the first quarter (ended May 2). This compared with net income of $6.8 million during the previous-year period.
“GameStop is a unique player in the gaming industry, and we are excited to be a part of the company’s next generation of leadership,” Wolfe said. He believes the board additions will help unlock GameStop’s “significant latent” value.
“We hope that all stakeholders, particularly the company’s critically valuable customer-facing employees, can feel confident that GameStop’s best days are ahead of it,” Wolfe said.