April 19, 2021
George Sherman, GameStop’s CEO for the past two years, is set to step down on July 31 or sooner if a successor is found before then. The nation’s largest video game retailer first mentioned a move for a new chief executive officer in a March 23 regulatory filing.
Sherman, a longtime retail executive, had become victim to a changing investor line-up and external political battle between independent investors and Wall Street hedge funds — the latter seeing GameStop’s stock price fluctuate wildly at skyrocketed valuations.
Much of that investor speculation was spearheaded by Ryan Cohen, the co-founder of online pet food company Chewy and a renegade investor who became owner of 10% of GameStop stock. Cohen’s actions, which resulted in GameStop shares increasing 4,000% in value over the past six months, put him on the board as chairman.
Cohen is looking to transition GameStop from a packaged media retail to digital retailer, when in reality he just wants a chief executive attune to his business outlook. Cohen thanked Sherman for his leadership and “many decisive steps” taken to stabilize the business during COVID-19 pandemic.
“The company is much stronger today than when he joined,” he said.
Sherman, who saw the board last week yank 587,000 shares from his stock portfolio, still leaves with shares worth hundreds of millions of dollars.
“I am very proud of what we have accomplished at GameStop over the past two years,” Sherman said. “It has been a privilege to lead so many dedicated, talented individuals, who collectively possess tremendous passion for the gaming industry. We have helped bring stability and strength to the business, including by de-densifying our store footprint, reducing costs and debt, and driving e-commerce growth.”
Video game analyst Michael Pachter with Wedbush Securities in Los Angeles, said that since early January, Cohen had “systematically” dismantled Sherman’s staff, his board and back-filled with his own candidates.
“It’s a reasonable conclusion that he would cut George loose as well,” Pachter said.