(Bloomberg) -- GameStop Corp. shares surged anew after Chief Financial Officer Jim Bell was pushed out in a disagreement over strategy, a move investors took as a sign the video-game retailer is on the comeback trail.
Bloomberg News reported Tuesday that Bell was ousted to make way for an executive more in line with the vision of activist investor and board member Ryan Cohen. Insider also reported on the split Wednesday and investors on the Reddit discussion site seized on the news, helping send the shares up 104% to $91.71 at the close. They went on to climb as much as 118% in extended trading.
Cohen has been pushing to transform GameStop from a brick-and-mortar retailer into an e-commerce company, and he’s been consolidating power at the chain. The former head of pet-supply site Chewy.com won three seats on GameStop’s board earlier this year.
An executive search firm has been engaged to find a finance chief with “the capabilities and qualifications to help accelerate GameStop’s transformation,” the company said Tuesday. Bell didn’t respond to a request for comment.
Trading in the video-game retailer spiked over the final hour of trading, with almost 30 million shares changing hands in the last 60 minutes of the session. That marked the most active day since Feb. 5. Other day-trader favorites, including AMC Entertainment Holdings Inc., headphone maker Koss Corp. and retailer Express Inc., spiked as Redditors shared their excitement for a group that has had a roller coaster of a year.
The Grapevine, Texas-based retailer is undertaking a strategic review, largely the result of pressure from Cohen, who bought about 13% of the shares and became the company’s largest individual investor. The activist has pushed GameStop to become a more direct competitor to Amazon.com Inc.
Diana Jajeh, GameStop’s chief accounting officer, will step in if the CFO post isn’t filled by Bell’s March 26 exit, the retailer said. Bell has held the position since June 2019.
“Mr. Bell’s resignation was not because of any disagreement with the company on any matter relating to the company’s operations, policies or practices, including accounting principles and practices,” the company said in a filing. The company declined to comment.
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Shares of GameStop had tumbled as much as 4.8% to $42.80 on Tuesday in extended trading following the announcement. Shares of the company soared as high as $483 in January during a so-called short squeeze.
GameStop wasn’t able to capitalize on that run-up, though the company said in December that it might try to raise as much as $100 million through a stock sale.
The frenzied stock action was driven by traders on the social network Reddit. Congress is currently holding a series of hearings to determine if the surge and subsequent collapse in GameStop shares exposed any holes in the financial system.
(Updates with shares starting in second paragraph.)
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