GameStop (NYSE:GME) shares are climbing on Monday thanks to big news from Ryan Cohen. It turns out the activist investor will be spearheading a turnaround story… and Reddit is paying close attention. Here is what you need to know about GME stock now.
Today GameStop announced that its board of directors had formed a Strategic Planning and Capital Allocation Committee. Underneath all those buzzwords is the reality that the company is taking a big step in a new direction. The committee will be responsible for identifying “initiatives that can further accelerate the Company’s transformation.”
Most importantly for investors, Cohen is at the helm of this new committee. The Chewy (NYSE:CHWY) founder became an activist investor, then ultimately a board member. His latest committee appointment reflects interest among retail investors in seeing Cohen save the day. Investors should also note that Cohen is joined on the committee by Alan Attal and Kurt Wolf. Attal previously served as the chief financial officer at Chewy.
So what exactly will the company do?
GameStop says it is already in action. Since creating the committee, GameStop says it has appointed a chief technology officer and created a succession plan for CFO Jim Bell. The company says it has also hired executives to lead e-commerce and customer care divisions.
Moving forward, it sounds like this new committee will put into action the bold plan from Cohen to see GameStop rival Amazon (NASDAQ:AMZN). The company press release talks of making GameStop a tech company, and of helping create value for stockholders. As Scott Deveau wrote for Bloomberg, Cohen is essentially leading a massive e-commerce shift.
How the company proceeds from here is not entirely clear. However, investors have been eager for a turnaround story since even before the Reddit rally.
GME Stock and the E-Commerce Shift
So what exactly does this mean for the company?
Consider what InvestorPlace Markets Analyst Tom Yeung wrote back in February. GME stock has mobilized the r/WallStreetBets army. The news today has Redditors calling for a new all-time high, as options traders continue to bet on $800 prices. However, retail investor hope alone cannot make those dreams come true.
Cohen, along with a revitalized board and a company turnaround story, can get a lot done. If retail investors can start acting like activist investors, Yeung says $500 comes back into view.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.