Chewy Co-Founder Cohen Takes 13% Stake in GameStop – TheStreet

GameStop  (GME) – Get Report reported in an SEC filing Monday that activist investor Ryan Cohen, the co-founder of e-commerce firm Chewy  (CHWY) – Get Report, has taken a 12.9% stake (9,001,000 shares) in the video game retailer, through RC Ventures.

The shares cost RC Ventures $75,899,399, excluding brokerage commissions, GameStop said. GameStop recently traded at $15.54, down 0.6%, and has soared about 161% year to date. Youngsters and adults alike have been playing video games until their fingers turn numb during the Covid pandemic.

As for Cohen’s motivations, GameStop said RC Ventures intends to continue to engage in discussions with GameStop’s board “regarding means to drive stockholder value, including through changes to the composition of the board and other corporate governance enhancements.”

While RC Ventures “desires to come to an amicable resolution with [GameStop, it] will not hesitate to take any actions that it believes are necessary to protect the best interests of all stockholders.”

Earlier this month, GameStop reported an adjusted third-quarter loss of 53 cents a share, as revenue fell 30% to $1 billion.

Analysts surveyed by FactSet expected the company to post a loss of 85 cents a share on revenue of $1.09 billion.

After the third-quarter report, Benchmark cut its price target on GameStop to $5 from $6, affirming a sell rating. It called the company’s third-quarter performance a “dramatic downturn,” Bloomberg reports. The notion that GameStop can compete with Amazon is “comical,” Benchmark said, and noted that the pandemic may be hurting in-store traffic.

“The vast majority of players have scant desire to buy product from a GameStop retail or e-commerce location, and the hottest games are often free-to-play like Fortnite, while GameStop’s e-commerce growth is more due to the virus than a compelling platform,” Benchmark said.

This content was originally published here.

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