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Ryan Cohen’s influence at GameStop continues to grow; he’ll become board chairman in June

Can the Chewy founder help the retailer turn its meme-driven stock surge into real transformation before investors lose interest?

Activist investor Ryan Cohen set out to transform video game retailer GameStop, and soon he’ll sit at the helm of the company’s board of directors.

The Grapevine-based company said Thursday that the Chewy.com co-founder will become board chairman after GameStop’s June 9 shareholders meeting.

GameStop shares got a premarket trading bump from the move but fell slightly after markets opened. At noon, shares were trading at just under $176. GameStop had been on a three-day losing streak triggered by a company plan to sell as much as $1 billion in additional stock.

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Cohen’s influence at the company has grown rapidly since he disclosed his investment in September. His RC Ventures owns just over 9 million GameStop shares, making it the second-largest stockholder behind BlackRock. Dallas hedge fund Maverick Capital, managed by Lee Ainslie, also holds a big stake in the company, with 4.6 million shares.

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GameStop, a company on the decline for years, was thrust into renewed relevancy among retail stock traders during a Reddit-driven stock surge earlier this year. The surge was sparked initially by news that Cohen would get involved with turning the company’s performance around and transforming it into a retailer that can thrive in the digital era.

In March, GameStop created a strategic planning committee and selected Cohen to lead it. In the last month, the company has jettisoned top executives like chief financial officer Jim Bell and chief customer officer Frank Hamlin. At the same time, the company announced it had poached a number of new executives from management positions at Amazon and Cohen’s Chewy.

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Cohen and his committee have taken credit for the hires, and each announcement involving the transformational efforts has driven more optimism among investors.

Despite underwhelming late 2020 financial results, the company’s executive reshuffle could point to a brighter future, according to executive coach and adjunct professor at Emory University David Nour.

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“I think Cohen and company are still formulating their vision of where they’re going, and how they’re going to get there,” Nour said.

But Nour, who’s done consulting work for executives at companies like Microsoft and IBM, believes Cohen has limited time to evolve GameStop’s operations before losing investors’ attention.

“Six months,” Nour said. “Six months to clean it up and make it attractive enough for someone to buy it, or else I think the honeymoon is going to be over.”

Bloomberg contributed to this story.