GameStop Corp GME could be extending its e-commerce line beyond video games and related consumer electronics products if a plan put in motion by its largest individual investor is realized.
What Happened: RC Ventures founder Ryan Cohen is in talks with the company management to poise itself as Amazon Inc’s AMZN rival in the e-commerce space, according to Bloomberg.
Cohen holds about shares 10% in the video game company, making him the largest individual investor in the gaming company. Whereas BlackRock Institutional Trust Company BLK and Fidelity Management & Research Company LLC are the leading institutional investors holding 15.31% and 14.72%, respectively.
Although Cohen’s plans are not yet made public, Bloomberg learned that the billionaire entrepreneur wants to expand GameStop’s online retail business. It may also expand into the logistics of shipping its products directly to customers.
In early September, CNN reported that the consumer electronics retailer is in plans to close around 400 to 450 stores worldwide this year.
Why Does It Matter: Cohen may be trying to save GameStop from a fate similar to Blockbuster Video, Bloomberg noted. Blockbuster Video lost out on business with the growing popularity of the online streaming giant Netflix Inc NFLX.
Cohen's experience in the e-commerce sector goes far back, as he started Chewy Inc. CHWY in 2011. After six years of operations, Chewy’s business was acquired by PetSmart for over $3 billion. Currently, the Florida-based company has a market cap close to $21.6 billion.
Price Action: After a 7.41% downward spiral during trading hours, GME shares rebounded 9.26% in the after-hours trading session at $9.56.
Photo by Dwight Burdette via Wikimedia
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