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Summary
- GameStop stocks shot up by over 57 per cent on Wednesday, reaching their highest level in over four years.
- The surge comes after GameStop added Chewy Inc founder Ryan Cohen to its board of directors.
- The company announced last Monday that it has signed an agreement with venture capital firm RC Ventures LLC to appoint Cohen and two others.
Stocks of Texas-based video game retailer GameStop Corporation (NYSE: GME, GME:US) soared to record levels on the news that Chewy Inc (NYSE: CHWY, CHWY:US) founder Ryan Cohen will be on its board of directors.
The stocks shot up by over 57 per cent on Wednesday, January 13, to close at US$ 31.4, reaching the highest level in over four years. On Monday, when GameStop broke this news, its stocks surged by almost 13 per cent.
GameStop Corporation currently holds a market cap of US$ 2.19 billion. Its stocks recorded an average share trading volume of 21.1 million in the last 10 days and that of 15.8 million in the past one month. The shares hold a 52-week high of US$ 38.65.
The company’s price-to-book (P/B) ratio stands at 6.597, while its price-to-cashflow (P/CF) ratio is 6.5 and debt-to-equity (D/E) ratio is 3.48, as per the TMX website.
©Kalkine Group 2020
The Deal
GameStop Corporation announced on Monday that it has signed an agreement with venture capital firm RC Ventures LLC and appointed Cohen and two other new members to its board of directors.
The move comes at a time when GameStop, which is the world’s largest video game retailer, is witnessing some trouble in its business amid the increasing popularity of digital downloads and heightened competition in the market. RC Ventures, which holds a 13 per cent stake in the company, had reportedly urged GameStop in November last year to strategically review its business and operations.
While the operational crises persisted, GameStop stocks recorded a surge of a whopping 620 per cent in the last six months and over 164 per cent in the last three months.
