GameStop Corp. stock prices rose upon news of Chewy.com former CEO Ryan Cohen raising his stakes with the gaming company.
This popular retail gaming destination for Xbox, PlayStation, and Nintendo has become the talk of the town this week. Stock prices soared as high as 28% this week after Cohen disclosed that he is holding talks with management and several board members in his firm, RC Ventures.
In addition, he wants to expand GameStop’s online selection to offering more merchandise and ship it more quickly to customers challenging Amazon.
However, Anthony Chukmba, an analyst at Loop Capital has little expectations for GameStop to turn into a worthy competitor to Amazon as he told Bloomberg:
“There are a lot of companies with much deeper pockets than GameStop that have had a very difficult time competing against Amazon, and some are barely competing with Amazon — Walmart, for example.”
Ever since the start of the year, GameStop shares plummeted to over 50% until April. Now it has soared to over 100% after hitting its worst low for the year.
High gaming demand expected in the holidays
One likely reason why Ryan Cohen became so invested in GameStop is because of the upcoming consoles that Microsoft and Sony will release this year.
He might pull off the same playbook that he did with Chewy—offering a lot of variety aside from the usual pet supplies such as food. Looking at how Chewy has evolved, they now offer other items ranging from pet beds to dog pajamas.
Ryan Cohen (RC Ventures) built @Chewy into a multi billion e commerce company, I have no doubt he will make @GameStop $GME into a leading e-commerce company as well.
(I don’t play the odds, I bet on the man) and Cohen is the man pic.twitter.com/dgTGuRfFVB
— Will Meade (@realwillmeade) September 21, 2020
After he became the co-founder and CEO in 2011, he sold Chewy to PetSmart in 2017 for roughly US$3 billion, per CNBC.
The timing might be right for Cohen due to a lot of people staying at home due to the pandemic and they might want to get gaming consoles this holiday season to entertain themselves.
Part of Cohen’s plan, as per Bloomberg, is to offer more online services such as trading old video games online and offer more game-streaming subscriptions similar to the Xbox Game Pass.
Investors are now observing if this move from Cohen could further keep its long-term uptrend intact for the next couple of months if he delivers on his actions to improve GameStop.
Featured image courtesy of JJBers/Flickr