Topline
Struggling brick-and-mortar retailer GameStop has been bulking up its executive ranks since billionaire investor Ryan Cohen joined the firm’s board in January—here are the tech veterans the firm has tapped for the digital transformation that analysts still aren't convinced can happen.
Key Facts
On Tuesday, GameStop appointed seven-year Amazon executive Elliott Wilke, who held senior roles at segments including Amazon Fresh, to the newly created role of chief growth officer, tasking him with expanding the reach of GameStop's customer rewards program and in-house magazine.
The move comes exactly one week after the firm tapped Jenna Owens, an Amazon director charged with distribution and fulfillment, as the firm's chief operating officer, a role vacated in 2018 when GameStop fired multiple executives after years of company underperformance.
Rounding out the firm's three C-suite additions this year, former Amazon Web Services Engineering Leader Matt Francis was chosen for the newly created role of chief technology officer in February, making him responsible for GameStop's ecommerce and technology functions.
GameStop's other executive hires since February include the Tuesday announcements of two new vice presidents for brand development and merchandising—both of whom previously worked at booming pets supplies store Chewy, the ecommerce firm Cohen co-founded in 2011.
Reddit traders, who have catapulted GameStop's stock to meteoric levels, celebrated the new hires on Tuesday, with one thread on on the r/WallStreetBets discussion board garnering more than 28,000 upvotes and comments including, "Jeff Pesos will be joining the GME board at this rate."
The executive shakeup is part of the broader restructuring effort headed by Cohen and two other board members, including former Chewy executive Alan Attal and Hestia Capital Founder Kurt Wolf, an activist shareholder who (like Cohen) has blasted former directors for GameStop's poor financial performance.
What We Don't Know
GameStop is still in search of a permanent chief financial officer after Jim Bell was ousted from the position in February because board members lost faith in his ability to help shift the company to an ecommerce focus. Cohen's committee is scouting a replacement but hasn't given a specific hiring timeline.
Key Background
GameStop’s unlikely surge has continued with a vengeance (and volatility) since Reddit traders declared it their meme stock of choice in January, as they plowed into Wall Street's most heavily shorted companies. The plight of brick-and-mortar retailers hit GameStop particularly hard over the past decade, wiping out nearly 90% of the stock's gains through the end of 2019 as PC gaming and independent companies like Minecraft gobbled up market share. The firm’s current CEO George Sherman came on board in April 2019, but GameStop's stock began to surge at the tail-end of last year, as 35-year-old Cohen started buying up shares and blasting management for "lack[ing] the mindset, resources and plan needed to [help GameStop] become a dominant sector player." Cohen's growing stake helped him and a couple of his Chewy colleagues earn seats on GameStop's board in January, and they've been mounting an effort to usher in a digital transformation for the firm ever since, fueling bullishness among Reddit traders expecting the turnaround.
Surprising Fact
GameStop shares have fallen nearly 45% from their late-January high, but they're still up a staggering 5,100% over the past year. Current prices of about $190 are nearly 5 times the stock's average analyst price target of roughly $40.
Chief Critic
"Given the continuation of very challenged results for GameStop, change is needed and soon," Bank of America analyst Curtis Nagle wrote to clients last Wednesday, adding that "very little detail" on a transformation plan was given on GameStop's fourth-quarter earnings call and reiterating a price target of $10 per share–about 5% of current prices. "We continue to be very skeptical on GameStop's efforts to address its long-standing issue of digital disintermediation."
Further Reading
GameStop's Massive Surge Creates A New Billionaire As Reddit Traders Bet Against Wall Street (Forbes)
GameStop CFO Ousted In Shakeup (Forbes)
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March 31, 2021 at 12:21AM
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GameStop's Executive Shakeup: Here Are The Amazon Veterans Tapped To Lead The Firm's Digital Transformation - Forbes
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