GameStop Corp. GME shares, which have seen extreme volatility since the start of the year, are higher Monday after the video game retailer issued a corporate governance update.
What Happened: GameStop said its board has constituted a strategic planning and capital allocation committee to zero in on initiatives to aid its business transformation. The committee to be chaired by Chewy, Inc. CHWY founder Ryan Cohen will include Alan Attal, a former Chewy executive, and Kurt Wolf as members.
Since its institution, the committee has appointed a chief technology officer, hired two executives to lead the company's customer care and e-commerce fulfillment functions and appointed Attal as chair of the board's nominating and corporate governance committee, and Wolf as chair of the board's compensation committee, GameStop said.
Additionally, the committee announced a CFO succession plan and has commenced a search for a new CFO with relevant technology and/or e-commerce experience.
GameStop also said the committee will focus on transforming the company into a technology business. It will also evaluate the current operational objectives, capital structure and allocation priorities, digital capabilities, organizational footprint, and personnel.
Why It's Important: Cohen, through his RC Ventures, owns about a 13% stake in GameStop. The activist investor began pushing for changes at GameStop after his venture started accumulating shares in GameStop late last year.
He joined the company's board in January and has ever since increased the pressure on management to work on cost cuts, improve product and service offerings and transform away from a brick-and-mortar business model to e-commerce.
GameStop shares, which skyrocketed to a high of $483 in late January following the r/WallStreetBets-induced short squeeze, pulled back significantly from the level, dropping to a low of $40.59 on Feb. 18.
The stock resumed the uptrend in late February, as retail investors piled back into the stock with renewed vigor.
In premarket trading Monday, GameStop shares were rallying 10.35% to $152.
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