What Happened to GameStop After CFO Resignation?...Stock Price Soars 104%

Stock Surges 101% After Market Close... Approaching $200 in 24 Days
Expectations Rise for Accelerated Digital Strategy Following GameStop CFO Resignation
"Hard to Explain Stock Surge" Concerns Also Raised

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] The stock price of GameStop, a U.S. game retail company that faced a bubble controversy last month, surged again just one day after the resignation of its Chief Financial Officer (CFO). This has sparked conflicting claims that it is either the second GameStop incident or that GameStop has been revived, drawing keen attention to the future direction of the stock price.

On the 24th (local time), GameStop's stock price began to soar just before the close of the New York Stock Exchange, ending the day up 104% at $91.71. After the market closed, in after-hours trading, the stock price continued to rise, reaching $184.59, up 101%. This is the closest the stock has come to $200 in 24 days since it hit $225 on the 1st.

The surge in GameStop's stock price is analyzed to be largely influenced by the previous day's resignation of its CFO, Jim Bell. Since Ryan Cohen, founder of the U.S. pet store Chewy, joined GameStop as an outside director last month, Bell and Cohen have reportedly clashed over the company's future strategy.

Cohen has been pushing for a digital transformation strategy, including expanding online game pack distribution at GameStop, while Bell, considering financial stability, is said to have advocated for slowing the pace of digital transformation. According to the U.S. economic media Business Insider, this conflict ultimately led to Bell being ousted by Cohen.

However, GameStop denied the ousting allegations in a statement released the previous day, saying, "CFO Bell voluntarily resigned, and there was no conflict with the board."

Cohen was a key figure who directly and indirectly influenced the GameStop incident last month. After increasing his stake in GameStop to 13%, becoming the largest individual shareholder, and joining as an outside director, many hedge funds that were pessimistic about his strategy engaged in massive short selling.

However, U.S. netizens, who have often criticized Wall Street asset holders such as hedge funds for profiting at the expense of the American middle class, launched a campaign to buy GameStop shares, arguing that the short selling was excessive. Notably, netizens from 'Wallstreetbets,' a subreddit on the U.S. internet community Reddit, are known to have led this campaign. This caused the stock price to surge up to 1600%, triggering the GameStop incident.

Foreign media interpret that after Cohen ousted CFO Bell and gained the upper hand on the board, expectations for growth through GameStop's digital transformation strategy increased, influencing the stock price. This is because retail investors began buying GameStop shares just before the market closed on the day following Bell's resignation.

At 3 p.m. Eastern Time (5 a.m. Korean time), when the stock price began to surge, the Wallstreetbets server went down for about an hour due to a surge in visitors. Even after the market closed, as GameStop's stock price continued to rise sharply, Wallstreetbets users posted reactions such as "GameStop has been revived" and "You must 'hold' no matter what."

Additionally, U.S. IT media The Verge reported that Keith Gill, known as the 'King Ant' who led the retail investors' buying campaign during the GameStop incident, disclosed last week that he purchased an additional 50,000 GameStop shares, which also influenced the stock price increase that day.

Stefan Wissink, an analyst at U.S. asset analysis firm Jefferies Research, said, "Cohen's digital strategy is gaining more momentum, and GameStop's business direction is expected to be significantly adjusted," but added cautiously, "It is difficult to analyze the direct reason for today's stock price surge."

This content was produced with the assistance of AI translation services.