Shoppers are spending more than ever on videogames, and one of GameStop Corp.’s biggest investors says the struggling retailer should get a bigger piece of the pie.
Chewy Inc. co-founder Ryan Cohen, who holds a nearly 10% stake in GameStop through his investment firm RC Ventures LLC, is pushing the company to conduct a strategic review after he says private talks with the board yielded little progress. Mr. Cohen, who first disclosed a position in GameStop in August, holds a stake worth roughly $79 million based on current trading levels.
In a letter sent Monday to the company’s board, Mr. Cohen said GameStop’s bricks-and-mortar-centric business model is outdated and lags behind the broader industry. He is urging the company to reduce the number of physical stores, focus on improving e-commerce and explore other tech-driven opportunities in areas such as esports, mobile gaming and game streaming.
Grapevine, Texas-based GameStop is “one of the most shorted stocks in the entire market, which speaks volumes about investors’ lack of confidence in the current leadership team’s approach,“ according to the letter, reviewed by The Wall Street Journal. ”We want GameStop’s leaders to do their jobs and implement a strategy for bringing the Company into the 21st century.”
GameStop didn’t immediately respond to a request for comment.
