Shares of GameStop (GME) surged into the close of yesterday (2/24) in addition to other stocks from Reddit’s Wall Street Bets like AMC Entertainment (AMC), Nokia (NOK), Blackberry (BB) and Koss (KOSS).
One of the reasons why GameStop stock surged over 70% is because former Chief Financial Officer Jim Bell resigned, many investors think that this resignation is making way for the new management team allowing GME stock to regain investor confidence. In addition, the company said in a release that it has begun searching for a new Chief Financial Officer whose capabilities and qualifications will help accelerate GameStop’s transformation.
However, if there is no permanent replacement by March 26, 2021 the company intends to appoint Diana Jajeh as the interim Chief Financial Officer. Many investors are wondering what the digital transformation of GameStop would look like in the months and years ahead.
Another reason why the stock could have surged is because of Ryan Cohen’s tweet also known as “Papa Cohen” among the Wall Street Bets Reddit forum, Cohen is known for having a significant holding in the company and for being brought onto the team to transform the company for the digital age.
Tweets like Cohen’s have a particular pull for those who follow the stock even if they are incomprehensible to others.
One tweet was posted by Cohen on Wednesday evening which depicted a McDonald’s ice cream cone accompanied by a frog emoji, soon after that tweet shares in GameStop stock began to surge, however it is impossible to say if there is any connection to Cohen’s tweet and the stock price.
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Among the discussion of the company’s digital transformation is a debate between whether the transformation includes a Steam competitor as a means for GameStop to transform into a digital company.
Many investors are asking if this would be viable for the company, in my opinion, it depends. If it is executed correctly then GameStop would tremendously transform their brand image, however most gamers still buy physical copies of games but since GameStop not only competes with video game retailers, but they are also competing with console makers themselves.
According to Nielsen, 66% of console gamers prefer physical copies and to note that physical copies are easier in rural areas that my lack high speed internet.
