GameStop (GME) shares rallied on Monday after the company announced a succession plan for its CEO. The company confirmed that George Sherman will officially step down by July 31 or earlier if the company finds a successor sooner.
Sherman was appointed as CEO in April 2019 following a failed sale attempt earlier that year. His ousting comes as GameStop shifts its focus to improving its e-commerce business. The Board said it will be looking for CEO candidates “with the capabilities and experience to help accelerate the next phase of the Company’s transformation.”
The separation agreement between GameStop and Sherman will allow the outgoing executive to retain more than 1 million shares of restricted stock. Last week, he forfeited over 587,000 shares after failing to meet performance targets set when he was hired.
The outgoing CEO said, “I am very proud of what we have accomplished at GameStop over the past two years, including during the difficult COVID-19 pandemic. 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.”
Ryan Cohen — who was named incoming Chairman of the Board earlier this month — said, “GameStop appreciates the valuable leadership that George has provided throughout his tenure. He took many decisive steps to stabilize the business during challenging times.”
Cohen will officially take over as Chair after GameStop’s Annual Meeting on June 9. His appointment is seen as a big step forward in the shift to e-commerce, as he is a co-founder of pet retail website Chewy.com.
GameStop also recently hired Amazon and Google executive Jenna Owens as its Chief Operating Officer.
Today’s rally also comes after one of GameStop’s largest shareholders, Keith Gill, upped his stake in the company last Friday. Gill, who’s known as DeepF——Value on Reddit and Roaring Kitty on YouTube, exercised all 500 of his call options on the stock adding 50,000 more shares to his holdings. He also purchased 50,000 additional shares on top of that move, upping his total investment to 200,000 shares worth more than $30 million.
Gill is seen as one of the main leaders who helped inspire the infamous GameStop short squeeze in January.
The investor has maintained his bullish stance on the stock, saying it’s more than just a chance to make a quick buck. In February testimony in the House Financial Services Committee he said, “As for what I expect moving forward: GameStop’s stock price may have gotten a bit ahead of itself last month, but I’m as bullish as I’ve ever been on a potential turnaround.”