How GameStop Shares Skyrocketed 58% Last Month
Shares of video game retailer GameStop (NYSE: GME) rose 58.2% in November, according to data from S&P Global Market Intelligence. The gains started when an activist investor presented a radically different business plan for GameStop.
Under the leadership of growth-oriented pet food retailer Chewy co-founder Ryan Cohen, venture capital firm RC Ventures built a 10% ownership stake on GameStop before proposing a dramatic strategy shift. On Nov. 16, RC Ventures sent a public letter to GameStop's board of directors. In the letter, RC underscored the explosive growth that is happening in the video gaming industry and noted that GameStop should be able to capture lots of shareholder value with the right strategy.
"Unfortunately, it is evident to us that GameStop currently lacks the mindset, resources and plan needed to become a dominant sector player," RC Ventures said. "In the two most recent quarters alone, the Company has lost another $277 million. To add insult to injury for GameStop's stockholders, the size of the global gaming market has grown by more than 2.5x since the last console cycle."
Source Fool.com
