Larry Cheng believes that some businesses have the potential to break the traditional paradigm – they can play chess while everyone else plays checkers.

Larry Cheng, co-founder and managing partner of Volition Capital, was the first major investor to back Chewy after the company was turned down numerous times by other firms.

Larry’s investment through Volition was key to the growth and expansion of Chewy, and as a result, Larry and Ryan remain “fast friends.” While GameStop is a different story than Chewy,  Larry’s involvement in the turnaround has become clear through his nomination and proceeding placement on GameStop’s Board at the 2021 annual meeting.

You can read more about the past between Larry Cheng, Chewy, and Ryan Cohen here.

At one minute after market close on Friday, Larry Cheng shares some of his thoughts on Twitter about companies breaking traditional paradigms.

Every company is a company. However, on rare occasion, some companies become movements. The company ends up standing for something much larger and more significant than itself. These companies break the traditional paradigm – they can play chess when everyone else plays checkers.

While it is not clear if GameStop’s latest board member is talking here about his philosophy towards the future of the gaming retailer, we can at least appreciate that he understands the greater impact a business can have on the world.

Source: Larry Cheng on Twitter

GameStop’s hiring frenzy amid “one of the biggest online transformations in history,” continues, as LinkedIn unveils the latest VP of Merchandising from Amazon.

The “hiring frenzy” first coined by the now former VP, Marketing Evan Smith in a February 2021 post highlighted by GMEdd.com has reigned true, revealing GameStop’s success in acquiring new talent at a rate that can be compared to the likes of the hottest new startup.

One of GameStop’s favorites to poach from? Amazon.

Revealed on LinkedIn,  GameStop has now recruited  six-year Amazon veteran Rob Mayer to serve as GameStop’s Vice President of Merchandising, alongside the several other VPs of Merchandising with tech backgrounds.

At Amazon, Rob Mayer most recently served as Amazon’s Head of Vendor Management, Consumer Electronics. 

This supports the thesis that GameStop will likely continue to expand into a wider range of electronics, surpassing solely gaming hardware.

This isn’t where the story ends, though.

Upon the recruitment of Matt Francis as Chief Technology Officer in February 2021, GMEdd.com began keeping track of GameStop’s latest hires using data from LinkedIn. While our last story highlighting GameStop’s recruiting released in May, the company has since doubled their new talent.

View an updated and interactive version of this sheet at GMEdd.com Report & Models

GameStop has hired, from Amazon alone:

  • Matt Francis, Chief Technology Officer
  • Josh Krueger, Vice President of Fulfillment
  • Maggie McCanner, Sr. Director Product Management
  • Jenna Owens, Chief Operating Officer, Executive Vice President
  • Neda Pacifico, Senior Vice President, Ecommerce
  • Elliott Wilke, Chief Growth Officer
  • Phil Landis, Director Ops Integration
  • Sean McHugh, Director of Environmental Health and Safety
  • Skyler Ramirez, Vice President, Instock
  • Joshua Flores, Inventory Specialist
  • Aaron Curtis, General Manager
  • Kristy Roach, Director IC/QA and Learning
  • John Crampton, Senior EHS Manager
  • Matt Furlong, Incoming Chief Executive Officer
  • Mike Rucepero, Incoming Chief Financial Officer

This indicates, from just what’s available to us publicly on LinkedIn, GameStop has poached double-digit Amazon employees, making an e-commerce centric pivot the clear trajectory.

Source: GameStop on LinkedIn

While GMEdd usually publishes fundamental research and corporate news, a reader offered to share their thoughts after attending GameStop’s 2021 Annual Shareholder Meeting. We decided it would be valuable for all investors to hear about the experience.

GameStop, the video game retailer from our childhoods, had become an unlikely pivotal part of so many lives in 2021, including my own. 

For myself, what had started off as a ~$5,000 bet on call options was raised to a $30,000 investment following my review of the original Research Report published by GMEdd.com in January. This was the entirety of my savings at the time.

When I found out that the company invited stockholders to attend The Annual Meeting at the company’s corporate headquarters in Grapevine, Texas I couldn’t miss it.

I booked flights for my significant other and I, as we are both GameStop investors, and began preparing for the meeting. We booked a few extra nights to enjoy the food, art, music, and history while in town.

On Tuesday morning we departed Southern California and couldn’t have been more excited. As we were preparing to board our flight we crossed a symbolic moment in our financial freedom. For the first time, the value of my portfolio surpassed $1,000,000.

Watching that figure appear on my screen immediately brought me to tears as the seemingly impossible was right there in my hands; a moment I’ll never forget.

The day of the Meeting

We arrived at GameStop HQ via Uber where a GameStop employee in a safety vest was on duty and kindly escorted us to the entrance of the meeting. The walk was several minutes long and we had the opportunity to discuss my experience as a shareholder and how much this meeting meant to so many. Our escort was very friendly and expressed his enthusiastic support for us as shareholders before going on to recommend some of his favorite local barbecue joints and entertainment.

One thing was clear, GameStop made it a point to share with their employees what this meeting was truly about given the current circumstances — expressing their gratitude and support for shareholders.

We checked in and entered the meeting chamber with half an hour till 10. Despite being early, the room was already packed, although we did manage to score a pair of seats in the second row; I counted approximately 120 attendees.

It wasn’t until later that I found out GameStop had established an overflow room to accommodate even more attendees. Based on a conversation with one of those shareholders later that afternoon, GameStop staff was continuously bringing out more and more chairs to accommodate the shareholders in overflow as they arrived.

  A warehouse room was being repurposed for overflow attendees, where a monitor was set up to view the main room.

Before the meeting began, GameStop passed out gift bags: GameStop branded drawstring backpacks containing mixed contents including a GameStop tee shirt, bottle, pen, etc.

When Sherman took the floor, he announced that they prepared 200 of these gift bags and made a joke about them running out a lot sooner than they thought they would.

Sherman’s attitude was very personable and he made several comments that kept the attendees laughing prior to beginning the meeting. Unlike the presentations stockholders are used to during ER conferences, it was unscripted, kind, relatable and filled with gratitude.

Prior to the start of the meeting, we were presented with short live clips of both Larry Cheng and Ryan Cohen on the large screen sitting ahead of us. As the incoming Chairman virtually checked in with us via zoom, absent of any comments, the crowd of shareholders clapped with enthusiasm; the energy in the room was surreal.

The meeting began with an announcement from Dan Reed, General Counsel and Corporate Secretary,

There are present at this meeting, in person or by proxy, more than the majority of all shares that are entitled to cast votes.

Shareholders may have overlooked the true meaning of this statement and got carried away upon hearing this. The room was flowing with excitement as the crowd began standing up to clap at the news; Dan smiled with content to see the investor enthusiasm.

Shortly thereafter, GameStop announced the preliminary results of various votes including Election of Directors, Advisory Non-binding Vote on Executive Compensation, and Ratification of the Appointment of Independent Registered Public Accounting Firm.

Then, we were presented with what in my opinion was the biggest part of the meeting, a few heartfelt statements from Ryan Cohen, GameStop’s new chairman.

The following are a few statements that were made:

We’re trying to do something that nobody in the retail space has ever done.

We continue to be blown away by your passion and support. You guys inspire us to think bigger and fight harder. 

You won’t find us talking a big game, making a bunch of lofty promises, or telegraphing our strategy to our competition… moving forward we want you to judge GameStop based on our actions and not our words.

As my dad would say, “buckle up.”

You can read Ryan Cohen’s full speech here on GMEdd’s June 9th AGM post.

Hearing Cohen make these statements was heartfelt. They felt genuine, and as if he was filled with just as much joy as the rest of the shareholders that attended.

While many of us are constantly seeking catalysts to extend our already well-justified confirmation bias, I believe these statements are just as good as any and I couldn’t be more satisfied with the presentation GameStop Corp. and Cohen put on for shareholders.

At any rate, the message was clear: GameStop is doing something that’s never been done before, buckle up and trust the process.

After the meeting

After the meeting I rushed to the door to pass out red headbands that I adorned with the $GME ticker, diamond hand emojis, and a stenciled decal of  The Roaring Kitty’s famous cat, a roaring kitty.

The headbands were accompanied by a letter I wrote to express my gratitude to the $GME investor base and share my vision of paying it forward and making a true impact within our communities. I brought a little over 200 headbands and ran out before being able to provide them to all attendees.

Post-Meeting Meetup

A large amount of shareholders reconvened at Boomerjack’s Grill & Bar, a local spot where we celebrated the successful meeting with drinks, food and comradery.

The diversity in shareholders — be it location, occupation, or age — was outstanding. One shareholder drove over 30 hours, from Rhode Island to Texas, to attend. The only thing we all had in common was love for the GameStop investor community and enthusiasm towards the future of the company.

We drank and laughed, celebrated and cried. So many shareholders expressed sincere gratitude for the words I shared. One shareholder even offered my significant other and I a place to stay, stating that his home was our home. The love received from this community was out of this world, true, sincere appreciation and gratitude. It was a day we’ll never forget.

Closing words

As an investor and an individual looking to break the financial chains that have bound my family for generations, I couldn’t have asked for more from the company and the thriving investor base. It is a blessing to have been afforded the opportunity to take part in this monumental day in company history and to meet so many stockholders that share the same passion, love, and support for the movement that is GME and the transformation of the retail giant.

During our flight, we saw a mountain peak extending through a thick layer of clouds, and the following thought came and stuck with me:

As the peaks of powerful mountains pierce through the clouds and into the great vastness of clear blue skies, so too shall our diligence pierce through and beyond the false, fragile and manufactured veil of greed leading us into the vastness and clarity of the great unknown.

sandwich guest wrote this article exclusively for GMEdd, Toast edited

Photo sources: AndBolos on Twitter, YouTube a4SicgRYTmk, MrRager1989, sandwich

Announced in addition to Quarter 1 earnings, GameStop Corp. intends to file with the U.S. Securities and Exchange Commission a prospectus supplement to the base prospectus included in the Company’s shelf registration statement on Form S-3 under which the Company may offer and sell up to 5 million shares of its common stock, from time to time, in “at-the-market” offerings.

The Company intends to use net proceeds for general corporate purposes as well as for investing in growth initiatives and maintaining a strong balance sheet. The timing and amount of any sales of shares, if any, will depend on a variety of factors, including prevailing market conditions, the trading price of shares and other factors as determined by GameStop Corp.

In the prospectus supplement, GameStop states that on June 8, 2021, the last reported sale price of common stock on the NYSE was $300.00 per share.

Our common stock has recently experienced extreme volatility in price and trading volume. From January 11, 2021 to June 8, 2021, the closing price of our common stock on the NYSE ranged from as low as $19.94 to as high as $347.51 and daily trading volume ranged from approximately 1,790,000 to 197,200,000 shares. 

Jefferies will be entitled to compensation at a commission rate of up to 1.5% of the gross sales price per share of common stock sold through it as sales agent pursuant to the Sales Agreement. 

Source: GameStop News Room, GameStop Investor Relations

Net Sales Grew 25% to $1.3 Billion

Appoints Technology Veterans Matt Furlong and Mike Recupero to CEO and CFO Positions, Respectively

GameStop Corp. (NYSE: GME), today reported results for the first quarter ended May 1, 2021.

First Quarter Fiscal 2021 Highlights

  • Net sales increased 25.1% to $1.277 billion, compared to $1.021 billion in the fiscal 2020 first quarter, overcoming a nearly 12% reduction in the Company’s global store base due to strategic de-densification efforts, and continued store closures across Europe due to the COVID-19 pandemic;
  • Gross margin was 25.9%, a decline of 180 basis points compared to the fiscal 2020 first quarter;
  • Reported selling, general and administrative expenses were $370.3 million, a decline of $16.2 million, or 4.2%, from $386.5 million in the fiscal 2020 first quarter. Adjusted for severance, transformation and other costs, selling, general and administrative expenses were $351.7 million, a decline of $29.5 million, or 7.7%, from $381.2 million in the fiscal 2020 first quarter;
  • Operating loss of ($40.8) million compared to ($108.0) million in the fiscal 2020 first quarter. Adjusted operating loss of ($21.6) million compared to ($98.8) million in the fiscal 2020 first quarter;
  • Net loss of ($66.8) million, or ($1.01) per diluted share as compared to net loss of ($165.7) million, or ($2.57) per diluted share, in the fiscal 2020 first quarter. Adjusted net loss of ($29.4) million or ($0.45) per diluted share, compared to adjusted net loss of ($157.6) million or ($2.44) per diluted share in the fiscal 2020 first quarter;
  • Adjusted EBITDA of ($0.7) million compared to ($75.5) million in the fiscal 2020 first quarter, and;
  • Income tax expense was $1.3 million compared to income tax expense of $50.4 million in the fiscal 2020 first quarter.  

Capital Structure and Liquidity Update

As of May 1, 2021, the Company had $770.8 million in cash and restricted cash, compared to $583.9 million in cash and restricted cash in the prior year. The Company had no borrowings under its asset-based revolving credit facility and no long-term debt.

On April 26, 2021, the Company announced it raised approximately $551.7 million in net proceeds through the issuance of 3.5 million shares of common stock under its “at-the-market” equity offering program, resulting in total shares outstanding of approximately 71.9 million. The Company has used and intends to continue using net proceeds to accelerate GameStop’s transformation as well as for general corporate purposes and further strengthening the balance sheet.

On April 30, 2021, the Company completed its voluntary early redemption of $216.4 million in principal amount of its 10.0% Senior Notes due 2023 on April 30, 2021. This voluntary early redemption covered the entire amount of the outstanding 10.0% Senior Notes, which represented all of the Company’s long-term debt.

Earnings Conference

GameStop has unveiled on their investor relations page that they will be livestreaming the Q1 2021 Earnings conference call webcast on YouTube.

This is highly unlike most other public companies, and may be a sign of GameStop paving the way to become more forward facing and shareholder-friendly with Ryan Cohen now serving as Chairman of the Board.

Source: GameStop News Room

Matt Furlong, Veteran E-Commerce Leader and Technology Industry Executive, Appointed CEO

Mike Recupero, Seasoned Technology Industry Finance Executive, Appointed CFO

GameStop Corp. today announced that it has appointed Matt Furlong as Chief Executive Officer and Mike Recupero as Chief Financial Officer. Mr. Furlong and Mr. Recupero join from Amazon, where they each held senior roles and oversaw various growth initiatives during their respective tenures. 

Matt Furlong, Incoming Ceo

Mr. Furlong is a veteran e-commerce leader with significant experience implementing growth strategies across global geographies and product categories. Most recently, he was a Country Leader and oversaw Amazon’s Australia business during a period of substantial growth. He was previously a Technical Advisor to the head of Amazon’s North America Consumer business. Throughout his nearly nine years at Amazon, he also ran a variety of product categories and oversaw strong market share expansion. Mr. Furlong began his career at Procter & Gamble, where he was an executive focused on brand, marketing and sales strategies.

Mike Recupero, Incoming CFO

Mr. Recupero is a seasoned technology industry finance executive, who spent more than 17 years at Amazon supporting growth across global geographies and product categories. He most recently served as Chief Financial Officer of the North American Consumer business after serving as Chief Financial Officer of Prime Video. He previously served as the Chief Financial Officer of the European Consumer business. He began his career at Amazon, holding Analyst, Manager and Director roles of increasing responsibility.   

Start Dates

These appointments reflect the refreshed Board’s focus on building a technology company and investing in growth. Mr. Furlong’s start date is June 21, 2021 and Mr. Recupero’s start date is July 12, 2021.

Source: GameStop Newsroom

The 2021 GameStop Annual Shareholder Meeting has officially concluded, setting the stage for Q1 2021 Earnings at market close and the proceeding conference call at 5:00pm EST.

From 11:00am to 11:15am at 625 Westport Parkway, Grapevine, Texas, the gaming retailer’s board worked to confirm new nominees such as Larry Cheng, the first investor in Chewy and a mentor to Ryan Cohen.

Ryan Cohen, now officially chairman of the board, gave a speech via Zoom to the crowd of over 200 shareholders. GMEdd has transcribed the speech, available below.

Ryan Cohen’s Speech

…We ushered in a whole new era of GameStop. On a personal note, I want you to know I’m humbled to be elected to your board and serve as your Chairman. We have a lot of work in front of us, and it will take time.

We’re trying to do something that nobody in the retail space has ever done but we believe we’re putting the right pieces in place and we have clear goals: delighting customers and driving shareholder value for the longterm. The management team and refreshed board will remain totally focused on
these goals at all times.

We know some people want us to lay out a whole detailed plan today, but that’s not gonna happen. You won’t find us talking a big game, making a bunch of lofty promises, or telegraphing our strategy to the competition. That’s the philosophy we adopted at Chewy.

Here are a few things we’ve done so far: refresh the board, added technology and retail experience to the leadership team, paid off all our long term debt and strengthened the balance sheet, and begun laying the foundation for long term growth.

Moving forward, we want you to judge GameStop based on our actions, not our words. Thank you everyone, and as my dad would say, “buckle up.”

In an effort to give investors their Cohen-fix, Ryan spoke about the progress his team has made at GameStop.

Twitter update

Ryan Cohen has since changed his Twitter bio, proudly representing his new role at GameStop alongside his past at Chewy.

Now, investors eagerly await the Q1 2021 Earnings release, supplemental presentation, and conference call.

Source: gmegang1 on Twitter (photo), Ryan Cohen on Twitter

At 12:39 PM ET, Ryan Cohen has tweeted once again. This time, it’s a photo of a SEARS big-box retail store being torn down for good.

On the surface, parallels can be drawn between Sears’ rise and fall through an unchanged retail experience and GameStop’s past, but speculators have begun to dig deeper and look for hidden meaning in the tweet.

The Origin

The photo originates from an article titled Former Sears Demolition Begins in Uptown District to Make Way for New Innovation Community Development in the Tampa Innovation paper. We already know GameStop is likely cementing themselves in Florida, but this information alone is not enough to substantiate a connection.

The article from January 15th, 2020 goes on to state:

 This urban renewal project… will shift from the property’s traditional retail origin and fully leverage the Innovation Community potential driven by its world-class, academic, scientific, and technology neighbors.

Sounds familiar.

Chewy Parallels

What is also striking is that Ryan Cohen and Chewy are no strangers to reimagining old Sears stores, as seen through Kelli Durkin’s retweet of a 2018 article by Bizjournals.

In a move emblematic of the retail industry’s seismic shift, Chewy – an e-commerce platform for pet products – has opened a customer service facility in what was once a Sears and a Woolworth’s.

Chewy opened up their premier customer service facility in a former Sears, a “Sign of the times”Mayor Josh Levystated. Is it possible that GameStop has begun to open their new South Florida customer service facility, and Ryan Cohen is paying homage to when he turned a Sears into a center for Chewy?

SEC Form ARS

Investors have also speculated that the final remaining letters on the SEARS logo, ‘ARS’, could reference the SEC Form ARS. Security & Exchange Commission (SEC) Form ARS, or the Annual Report to Shareholders, is a document used by a public company to report its latest financial performance to its shareholders shortly before its annual shareholders’ meeting.

 As revealed as early as Q4 2020 earnings and confirmed yesterday, GameStop’s annual shareholders’ meeting is on Wednesday, June 9th. While this is an uncanny coincidence, GameStop has long replaced the considerably less informative Form ARS with the more comprehensive Form 10-K, so this would have to be released in conjunction.

In GameStop’s Fourth Quarter and Fiscal 2020 Results News Release, the Company revealed that they intend to “modify its method of communicating its quarterly financial results.” In a move similar to Chewy, GameStop announces that future financial results will accompanied by a presentation to include detailed supplemental highlights. Could this be the Form ARS the incoming GameStop Chairman may be referencing?

Let us know your thoughts in the comments and in the GMEdd.com Discord Server.

Sources: Ryan Cohen on Twitter, Tampainnovation.com, SBFJ Venture on Twitter, Investopedia, GameStop News Release

At the conclusion of a highly volatile day for NYSE:GME, GameStop Corp. today announced that it will report first quarter fiscal 2021 earnings results after the market closes on Wednesday, June 9, 2021

investor conference call

The Company will host an investor conference call at 5:00 pm ET on the same day to review the company’s financial results. The call and any supplemental information can be accessed at GameStop Corp.’s investor relations home page at Investor.GameStop.com. The phone number for the investor conference call is 877-451-6152 and the confirmation code is 13720011. The conference call will be archived for two months on GameStop’s corporate website.

Annual Shareholders Meeting

GameStop has also confirmed that its Annual Shareholders Meeting is scheduled for Wednesday, June 9, 2021 at 625 Westport Parkway, Grapevine, Texas. The meeting, which is not open to the media and requires shareholders to provide proof of ownership and valid identification, is expected to take place at 11:00am ET and conclude at 11:15am ET. Chief Executive Officer and director George Sherman will attend the meeting in-person with the remainder of the Board of Directors attending virtually.

Source: GameStop Newsroom

On April 16th, 2021, retail’s investing icon Roaring Kitty, made famous for his massive bets on GameStop alongside his past YouTube streams, bid farewell to his cat-themed online persona. That is, until now.

At 10:00am EST, Roaring Kitty has shocked the world and tweeted once again.

Returning to Twitter in epic style, the GameStop investor shared a video of a dimly lit cat perched up on a ledge, potentially suggesting something grand is upon us. The video is paired with the song Carmina Curana-O Fortuna by Hugues Reiner; a track that is sure to make for an intense build-up.

Some fans of the trader, who is not a cat, claim to have encountered issues playing the video, so GMEdd.com has uploaded it here  in case of concern.

Will Roaring Kitty stick around? Or was this tweet just to let us know he’s still watching? 

Source: Roaring Kitty on Twitter