- Lead investor Ryan Cohen has pitched his idea to evolve the struggling company into an Amazon competitor.
- NYSE:GME shot up nearly 30% on the news despite the broader markets falling.
NYSE:GME has stirred for the first time in a while as there have been plans put forth by a lead investor for the beleaguered video game seller to evolve its scope. Shares catapulted up nearly 30%, reaching a new 52-week high of $11.17, which is the highest level the stock has seen in nearly 18 months. The stock pulled back by 4.92% on Wednesday, something understandable after a surge as large as the one exhibited earlier in the week.
The catalyst was a new vision for GameStop by top investor Ryan Cohen who heads RC Ventures LLC, an investment firm that now owns a 10% stake in the company. Cohen previously was founder and CEO of Chewy (NYSE:CHWY), the leading e-commerce site for pet food and supplies. With the massive success of Chewy, investors are optimistic that Cohen can transform GameStop back into a legitimate e-commerce business that could one day eat into the market share of Amazon (NASDAQ:AMZN). Presumably, GameStop would branch out from the video game and toy market to include other products that would make it more of a one-stop consumer shop.
GME stock dividend
If GameStop executives adopt Cohen’s lofty plans, they could have their work cutout for them. Amazon currently has a $1.5 trillion market cap and an unparalleled global supply chain and customer base so at this point, it should be considered impossible to dethrone this company as the king of e-commerce. With the introduction of completely digital game consoles with the upcoming release of the new Microsoft Xbox and Playstation 5, GameStop is in danger of being forced out of relevance in the same way that Blockbuster Video met its fate thanks to Netflix (NASDAQ:NFLX).
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