The past week has been a tenuous one for GameStop (NYSE:GME) stock. Its earnings report proved less than stellar, missing estimates. Talks of a stock offering came the same day, worrying investors of a dilution of Class A common stock. However, much has happened since that is giving the company new life.
It started with a Roaring Kitty r/WallStreetBets post which rallied the GameStop troops. That momentum has only snowballed with news of the company’s change of guard.
GameStop told the U.S. Securities and Exchange Commission last night that eight of its board members will be resigning. Notable names in the industry like Reggie Fils-Aimé of Nintendo (OTCMKTS:NTDOY) fame and Activision’s (NASDAQ:ATVI) Kathy Vrabeck are among those stepping down.
This mass exodus follows last month’s announcement that CFO Jim Bell would be stepping down. Coincidentally, his resignation comes on Friday.
Why This Is Good News for GME Stock
At this point, everybody knows that GameStop is Ryan Cohen’s show now. The Chewy (NYSE:CHWY) founder has been given captaincy of the GameStop turnaround, and many are theorizing these departures as all part of the plan. Cohen is likely the driving force behind these departures and wants to trim the fat in order to make new additions that he feels can put more force behind the turnaround.
GME stock is also improved by the reinvigorated r/WallStreetBets mob, who have faith in Cohen. Roaring Kitty’s call-to-hold and yesterday’s news have done good for the subreddit’s morale as it looks to either buy more GME stock or… buy more GME stock. The only way is up for the GameStop fanatics.
r/WallStreetBets isn’t the only institution that is sunk neck-deep in the GameStop craze. The Mormon Church’s investment branch has recently slashed its investments in companies like Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) in order to make room for GME stock in its portfolio.
GME stock is up by 38% this morning following these insights, and will likely continue its upward trend through the week.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article.