The Wall Street Journal spoke to current and former GameStop board members to break the news on conclusions GMEdd drew four months ago. 

The story GameStop’s Power Player: How Outsider Ryan Cohen Wrested Control by Sarah E. Needleman at the Wall Street Journal released today describes an inside look at how the founder of Chewy took over a struggling gaming retailer.

Strikingly enough, GMEdd already published most of these details by analyzing digital breadcrumbs, without speaking to any confidential sources.

The story begins in 2019

Back in May, GMEdd.com revealed that Ryan Cohen had started to build his GameStop position as early as 2019, which has now been discovered by the Wall Street Journal.

To recap, the company was hoping for a buyout after years of unfruitful executive shakeups.

In early 2019, GameStop tried and failed to sell itself after years of stagnant growth and corporate strategy missteps. That spring, it hired a new CEO, George Sherman, a veteran of retailers including Advance Auto Parts. Mr. Sherman was GameStop’s fifth CEO in less than two years. Later in 2019, Mr. Cohen began building his stake. [WSJ,  Aug. 12 2021]

The WSJ now reports that Ryan Cohen’s swift accumulation of power at GameStop was orchestrated from his Florida beachfront apartment as the result of a series of previously unreported moves, people familiar with the matter said.

August 2020 ownership disclosure by Ryan Cohen and RC Ventures.

In May, GMEdd wraps up the history of Ryan Cohen’s initial GameStop strategy as:

Ryan Cohen started buying into GameStop in April of 2019, with a disclosure following increased holdings in August 2020. It’s unknown as to when he made the decision and how much time was spent beforehand figuring out activist investor logistics coinciding with a PR blitz, but it is reasonable to assume he was strategically building public-facing credibility for himself before revealing his high-stakes investment. [GMEdd, May 29 2021]

Have a seat

The WSJ reports that as GameStop’s board learned of Ryan Cohen’s stock purchases the directors offered him a board seat, according to current and former board members.

This aligns with the detail pointed out by GMEdd’s own Rod Alzmann that GameStop’s Investor Relations had referred to Ryan Cohen as a great shareholder since April of 2019.

Rod Alzmann’s rough notes after speaking to GameStop IR in late 2020.

The confidential sources claim that Cohen turned down the entreaty, telling directors that a sole board seat would give him no meaningful influence over decision making.

In November, Ryan Cohen released his famous letter stating just that.

According to these sources, the board responded to Cohen’s November 2020 letter by hosting a private call with the activist investor.

kill the cash cushion

The WSJ reports that Cohen erupted the following month when GameStop said it would sell $100 million in new stock.

Directors claim that the topic hadn’t come up on his call with the board.

Cohen, a 12.9% shareholder of GameStop at the time, reportedly worried the plan would damage the company’s standing among investors by reducing the value of existing shares.

The confidential source reveals that in response, Cohen wrote an email to GameStop’s then-chairwoman, Kathy Vrabeck, warning her that he would go public with his disapproval if the company proceeded with the sale.

Verbatim, we imagine the email went something like this.

Cohen urged her to share the email with other directors, people familiar with the matter said. The company shortly after scuttled the planned stock sale, for reasons undisclosed.

A former board member claims that Cohen made a significant power move here.

The ill-timed stock offering created a wedge and he used it to his advantage.

Reportedly leery of a prolonged fight and open to new ideas to improve the business, the board invited Cohen and his former business partners Jim Grube and Alan Attal to join in January.

“Welcome” aboard

The sources claim that Ryan Cohen approached his first board meeting, held over videoconference that same month, as a blitz.

Cohen also attended the Annual Shareholders Meeting via videoconference in June.

In his first meeting on the board, Cohen reportedly proposed the formation of a new committee to review GameStop’s strategy for spending and hiring.

Cohen requested this committee consist of himself, fellow activist investor Kurt Wolf and former Chewy executive Alan Attal. Some members of the board said they worried about permitting Cohen so much power on subjects of day-to-day management, but the proposal was approved.

GameStop announced the committee via News Release on March 8th.

The WSJ reports that Mr. Cohen proceeded to personally recruit new talent, including executives from Amazon.com Inc., Alphabet Inc.’s Google, and Chewy, all big names that GMEdd has been tracking hires from since May.

Cohen reportedly countered other executives that questioned his decisions, telling them that “the pace of change needed to quicken.”

In an instance shared by people familiar with the matter, Ryan Cohen asked a company executive to sign a deal to lease a new fulfillment center, hoping to speed up delivery times for customers’ online orders.

The executive reportedly pushed back with the belief that such a request from a director was unusual and against company policy that called for such contracts to undergo vetting that included multiple executives. The project later moved forward.

Sudden rise

GameStop directors were reportedly concerned about the sudden rise in valuation.

The board debated whether to discuss it publicly and whether the stock volatility could lead to shareholder lawsuits, current and former directors said.

Few directors other than Mr. Cohen were familiar with Reddit, the social network where speculative investors began to conjugate, board members said.

GameStop quickly became Reddit’s stock market darling.

The WSJ reports that Ryan Cohen’s rapidly-growing celebrity status, combined with his tendency to dabble in the company’s operations, earned him fans neither in the boardroom nor among GameStop’s executive ranks.

“Ryan personified a hero against the hedge funds,” a former board member said

One GameStop director, PetSmart Inc. chief executive J.K. Symancyk, on multiple occasions told board members that Chewy under Mr. Cohen was unprofitable and later required a full information-technology overhaul, according to people familiar with the discussions.

Several directors interpreted the remarks from Mr. Symancyk, who met Mr. Cohen in the process of joining PetSmart, as criticism. Others reportedly viewed the commentaries as matter-of-fact descriptions.

Get the bell out

In an effort to gain more control of GameStop’s spending,  Cohen pushed for finance chief Jim Bell to be the first senior executive to go, people familiar with the matter said.

It worked.

On February 23rd, 2021, GameStop announced Jim Bell’s resignation via News Release.

A handful of top executives, including CEO George Sherman, considered stepping down and claiming their contracts had been breached because of the reduction in their duties due to the board member’s involvement in corporate affairs, a person familiar with the matter said. 

The WSJ reports that the new board member was brash and outspoken, while George Sherman, 60, tended to keep to himself, people who know them both said. 

Though Mr. Sherman worked through most of the pandemic in GameStop’s Texas headquarters, it was Mr. Cohen, on all-hours video calls from his apartment, who called many of the shots, according to board members.

On top of this, new employees, likely appointed by Cohen, frequently sought out the brash new board member directly with questions about the business or operations, bypassing the CEO, people familiar said.

Ryan Cohen encouraged Mr. Sherman to step aside, and in April he agreed.

George Sherman officially departed GameStop in June.

In private conversations, Cohen reportedly expressed shock that even executives with relatively short tenures could leave with lucrative stock awards.

Moving Forward

In conversations with directors and executives, the new Chairman emphasized improving the experience for GameStop customers, predicting that gamers will support the company if it provides better service, competitive prices and faster shipping.

The WSJ claims that people familiar with the matter said that through midsummer, GameStop has hired more than 80 new employees with technology experience.

Huh. Wonder where they got that data.

View GMEdd’s latest tech hire report, detailing over 100 tech hires, at GMEdd’s Reports and Model page.

While the former board had intentions to sell shares at sub-$20 for an insignificant cash cushion, Ryan Cohen has raised more than $1.6 billion at greater than $200 per share, eliminating the company’s long-term debt and funding a transformation that will be studied in business schools for decades.

Power to the players.

Source: Wall Street Journal

On April 19th, 2021, GameStop issued a News Release and a more detailed Form 8-K to announce the official Chief Executive Officer Succession Plan.  George Sherman will be stepping down as Chief Executive Officer on July 31, 2021, or earlier upon the appointment of a successor.

The Board of Directors thanked Mr. Sherman for his significant contributions since being appointed Chief Executive Officer in April 2019.   

Most interesting of all, the GameStop board’s Strategic Planning and Capital Allocation Committee is leading the search to identify Chief Executive Officer candidates with the capabilities and experience to help accelerate the next phase of the Company’s transformation.

Who is at the head of this committee? Ryan Cohen. Other members include ex-Chewy executives Alan Attal and Jim Grube, whom Ryan Cohen chose as his board seats granted through the RC Ventures Agreement (Kurt Wolf of Hestia Capital was formerly on this committee, but parted ways with GameStop in early April).

Subject to Mr. Sherman’s reelection at the Company’s 2021 annual meeting of stockholders, he has agreed to continue to serve as a director of the Company. Following Ryan Cohen’s initiative, Mr. Sherman has declined to receive compensation for his service as a director, both before and after the Separation Date.

In the News Release, Ryan Cohen, incoming Chairman of the Board, commented,

GameStop appreciates the valuable leadership that George has provided throughout his tenure. He took many decisive steps to stabilize the business during challenging times. The Company is much stronger today than when he joined. On a personal note, I also want to thank George for forming important partnerships with the new directors and executives who have joined GameStop in recent months.

The Form 8-K also touches on George Sherman voluntarily agreeing to the elimination of all other severance rights provided in his employment agreement and has also agreed to cancel his 2020 performance-vested restricted stock award, which consisted of 308,477 shares of common stock.

George Sherman also provided departing remarks,

I am very proud of what we have accomplished at GameStop over the past two years, including during the difficult COVID-19 pandemic. It has been a privilege to lead so many dedicated, talented individuals, who collectively possess tremendous passion for the gaming industry. We have helped bring stability and strength to the business, including by de-densifying our store footprint, reducing costs and debt, and driving e-commerce growth. I also want to take this opportunity to thank our Board for all of its collaboration and support.

Source: GameStop Form 8-K , News Release

GameStop has today announced that the board intends to elect Ryan Cohen, founder of Chewy, as Chairman of the Board at the annual meeting, which will take place in Grapevine Texas on June 9th, 2021. GameStop also states that it will be nominating the following six individuals to stand for election to its Board of Directors: Alan Attal, Larry Cheng, Ryan Cohen, Jim Grube, George Sherman and Yang Xu.

GameStop has also shared updates that include:

  • Following the Annual Meeting, the Board intends to elect Mr. Cohen as Chairman;
  • Following the Annual Meeting, all directors will be compensated 100% in equity;
  • Following the Annual Meeting, individual director compensation will be reduced approximately 28% from the prior year, and
  • Effective immediately, the Board has appointed Mr. Grube to serve on the Strategic Planning and Capital Allocation Committee.

About the new names

Larry Cheng is Co-Founder and Managing Partner of Volition Capital, a leading growth equity investment firm based in Boston, Massachusetts and the first investor in Chewy. He has more than two decades of venture capital and growth equity investing experience based on time at Volition Capital, Fidelity Ventures, Battery Ventures, and Bessemer Venture Partners. He presently leads the Internet and Consumer team at Volition, focusing on disruptive companies in e-commerce, internet services, consumer brands, and digital media and gaming. He received his bachelor’s degree from Harvard College where he concentrated in Psychology.

Yang Xu is Senior Vice President of Global Finance and Treasury at The Kraft Heinz Company. She has more than 20 years of broad experience across the capital markets, finance, strategic planning, transactions and business operations in the U.S., Asia and Europe. Prior to The Kraft Heinz Company, she held roles with Whirlpool Corporation and General Electric Healthcare. She has a bachelor’s degree in Finance from Wuhan University, a master’s degree in management from the HEC School of Management and a master’s in business administration from the London Business School.

What does this mean?

First, we are glad to see that RC Ventures is, in fact, on pace to control the GameStop board. Surprisingly, though, without Kurt Wolf and instead a former venture capital partner from his Chewy days. 

With Cohen being placed as chairman of the board and Sherman to be re-elected, George Sherman will remain serving as CEO. There is also an apparent reversal in Jim Grube being asked to serve on the Strategic Planning and Capital Allocation Committeea team we speculated he wasn’t originally a part of , anticipating a CFO announcement instead. Could both Jim Grube as CFO and Ryan Cohen as CEO still happen? Of course. But it seems they both may already have found their roles, for now at least.

Source: GameStop News Release

While GameStop’s shares fell 33.79% today due to a disappointing but expected Q4 earnings release, the market largely ignored the greatest news of all: RC Ventures is on pace to control GameStop’s board.

In Item 9B. Other Information, the filing reveals that, as of yesterday, the Board has not determined the definitive slate of nominees but currently expects that the following incumbent directors will retire from the Board at the 2021 Annual Meeting: Lizabeth Dunn, Paul Evans, Raul J. Fernandez, Reginald Fils-Aimé, William Simon, James K. Symancyk, Carrie W. Teffner and Kathy P. Vrabeck.

The contemplated retirements are not because of a disagreement with us on any matter relating to our operations, policies or practices.

This indicates that the only remaining board members will be: George E. Sherman, Alan Attal, Ryan Cohen, Jim Grube, and Kurtis J. Wolf.

Alan Attal, Ryan Cohen, and Jim Grube, all of which are former Chewy execs, were the board members put forth in the agreement with RC Ventures.

Kurtis J. Wolf was placed on the board in June 2020 following his Restore Gamestop activism. In May 2020, Hestia Capital Partners LP, Permit Capital Enterprise Fund, L.P, his investment group, issued a detailed 80-page presentation titled “More Change Is Needed,” advocating for stockholder representation and a non-retail centric turnaround.

Kurtis J. Wolf was also recently placed on the Strategic Planning and Capital Allocation Committee, alongside Ryan Cohen and Alan Attal.

It’s safe to assume that Kurtis J. Wolf will be siding with RC on any votes within the board.

With Kathy P. Vrabeck retiring, the Executive Chairman role will be freed up as well. Gotta wonder who will fill that role.

So that leaves the legacy board with only George E. Sherman. Diana Saadeh-Jajeh is currently the interim CFO, but does not hold a seat on the board. It is likely we will see Diana Saadeh-Jajeh retire once a permanent Chief Financial Officer is found as well. You don’t have to look far for who we expect it to be. Diana Saadeh-Jajeh’s retirement will also free up the Chief Accounting Officer position.

With George Sherman remaining as the only legacy board member, the Chief Executive Officer will be outnumbered four to one.

Unless GameStop nominates replacement board members ahead of the 2021 Annual Meeting, we will see the thirteen-member board fall to just five, with RC at the helm

Source: GameStop Form 10-K

When New Jersey teacher Steven Titus sent emails to GameStop Corp. complaining about the slow shipping of an order, he received a late night call to apologize – from a director on the video game retailer’s board.

Ryan Cohen took it upon himself to speak with the New Jersey teacher.

“I just got your email, I’m so sorry this happened. Let me get to the bottom of this,” Ryan Cohen told Titus.

Ryan Cohen then asked GameStop’s new customer service chief Kelli Durkin, who spearheaded initiatives at Chewy that included written personal notes to customers, to look into the matter.

Titus was reimbursed for his purchase, even though he had not requested a refund and was only complaining about the tardiness of his order.

This phone call is stated to have occured in early March.

As previously speculated, it’s safe to say that some of Ryan’s first initiatives at GameStop will be to revamp the customer service experience, as proven by his recruiting of Kelli Durkin into the role of Senior Vice President of Customer Service at GameStop.

Source: Reuters

GameStop has announced that the board has formed a Strategic Planning and Capital Allocation Committee to identify initiatives that can further accelerate the Company’s transformation.

The Committee is comprised of Alan Attal, former Chief Operating Officer of Chewy, Ryan Cohen, former CEO of Chewy, and Kurt Wolf, chief investment officer of Hestia Capital Management, with Ryan Cohen serving as Chairperson of the committee

The statement goes on to claim credit for some of the recent hirings and forward thinking initiatives 

  • Appointing a Chief Technology Officer.
  • Hiring two executives to lead the Company’s customer care and e-commerce fulfillment functions, respectively.
  • Appointing Mr. Attal as Chair of the Board’s Nominating and Corporate Governance Committee and Mr. Wolf as Chair of the Board’s Compensation Committee.
  • Announcing a Chief Financial Officer succession plan and commencing a search for a new Chief Financial Officer with relevant technology and/or e-commerce experience.

In the final paragraph, the news release states that the Committee will continue to focus on identifying actions that can transform GameStop into a technology business and help create enduring value for stockholders.

The committee is responsible for evaluating areas that include GameStop’s current operational objectives, capital structure and allocation priorities, digital capabilities, organizational footprint, and personnel.

If the committee is responsible for evaluating digital capabilities, that essentially places Ryan Cohen as GameStop Chairperson of E-Commerce. 

Source: GameStop Corp. News Room


GameStop Corp. today announced that it has appointed Matt Francis to the newly-created role of Chief Technology Officer. Mr. Francis has a start date of February 15, 2021.

 Mr. Francis brings more than two decades of experience in e-commerce and consumer technology to GameStop. Most recently, he was an Engineering Leader at Amazon Web Services… At GameStop, Mr. Francis will be responsible for overseeing e-commerce and technology functions. 

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