GameStop New Board
3 New members added effective immediately with current board increasing from 10 directors to 13
Three addition to board results from activism from Ryan Cohen (VC Ventures)
4 directors not standing for reelection in June (including Chairman Kathy Vrabeck). Board size decreases to 9
New directors:
Ryan Cohen
Founder and Former CEO of Chewy (sold to Petsmart in 2018)
Largest individual investor in Apple and investor in Wells Fargo (concentrated investor)
Owns about 13% of GameStop
Appointed to the Nominating and Corporate Governance Committee of the Board of GameStop
Not taking any compensation from GameStop
Ryan Cohen cannot do the following without the approval of the board during the standstill period (until around February 2022)
Buy more than 20% of the company - doing so will qualify him as an interested stockholder
Change the board of directors
Bring any proposal to shareholders
Alan Attal
Appointed to the Compensation Committee of the Board of GameStop
Former Chief Marketing Officer (2017-2018) of Chewy
Former COO (2011-2017) of Chewy
Jim Grube
Appointed to the Audit Committee of the Board of GameStop
Former CFO Vacasa
Former Senior VP of Finance of Hilton
Former CFO of Chewy
One of the Directors of Finance at Amazon (2007-2009)
Analysis and Conclusion
We will need to see concrete changes first to know quantitative impacts.
As for qualitative impacts, it can only be positive. The board of directors now have more skin in the game with the total insider ownership at 33%.
Insiders cannot loan their shares to short sellers and we know that 97% of shares are short. This can only mean that these short positions are highly leveraged and shares are being counted several times. Short squeeze is very likely.
Company now calls itself “a digital-first omni-channel retailer, offering games and entertainment products in its over 5,000 stores and comprehensive e-commerce properties across 10 countries.” With 34% of sales in the holiday seasons online, they are finally moving towards e-commerce. Ryan Cohen is a big asset.
Ryan Cohen could possibly become chairman in June
All of the board members are highly qualified
I keep my buy rating on GameStop (currently 20% of my portfolio)
