GameStop shares jump after CEO steps down, ‘Roaring Kitty’ raises stake

Shoppers wait for a GameStop store to open at Tysons Corner Center in Tysons, Virginia on November 27, 2020.

Hannah McKay | Reuters

GameStop rebounded on Monday after the brick and mortar video game retailer announced its succession plan to move to e-commerce following a historic Reddit short squeeze earlier this year.

GameStop’s shares rose more than 11% in early trading, opening around $ 172.

The company announced that chief executive officer George Sherman will step down on Monday following the appointment of a successor on July 31 or earlier. The board is conducting a search to identify CEO candidates with the skills and experience that will help accelerate the next phase of the company’s transformation, GameStop said in a statement.

While GameStop stock fell well below its record high of $ 483 in January, the stock is still up a whopping 720% in 2021. To capitalize on the massive rally, GameStop announced a $ 1 billion stock sale in early April to accelerate the e-commerce transition led by activist investor and board member Ryan Cohen, co-founder of Chewy.

The company also hired former Amazon and Google CEO Jenna Owens as its new chief operating officer.

Some investors also comforted themselves with Keith Gill’s move on Friday to double his GameStop bet, foregoing a quick million dollar win on an options trade. Gill is perhaps the biggest influencer in Reddit retail.

The investor, who offers DeepF —— Value on Reddit and Roaring Kitty on YouTube, exercised his 500 GameStop call option contracts as they expired on Friday, giving him 50,000 more shares at an exercise price of only 12 USD. If he had sold the options at Friday’s price, he could have made more than $ 7 million on the bet.

In addition to exercising these options contracts, Gill bought 50,000 more GameStop shares and increased his total investment to 200,000 shares valued at more than $ 30 million.

Gill’s trading information matches his Reddit posts, which appear to be snapshots of his investment account. Contributions have not been independently verified by CNBC.

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