SEC scrambling to deal with meme stock mania: Sources
Sources tell FOX Business’ Charlie Gasparino that securities lawyers says SEC looking at possible manipulation cases that will be difficult to prosecute.
With GameStop shares up over 1,492% this year alone, investors are in-line for a busy day.
The company is set to hold its annual shareholder meeting and the video game retailer will also release its first quarter earnings for 2021 after the bell on Wednesday.
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The shareholder meeting is expected to take place at 11:00 am EDT with CEO George Sherman attending the meeting in person while the rest of the board of directors will attend virtually.
GameStop announced that Chewy.com founder Ryan Cohen – who joined the company's board in January following a massive, Reddit investor-fueled short squeeze that sent its shares soaring over 1,492% – this year will become chairman following the shareholder meeting.
Cohen's investment firm, RC Ventures, amassed an approximately 13% stake in GameStop earlier this year, with the goal of transforming the company into a major e-commerce player that sells a wide variety of merchandise with fast shipping.
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Cohen has cleaned house during his time with GameStop, with Sherman, GameStop chief financial officer Jim Bell and chief customer officer Frank Hamlin all announcing they will step aside from their positions. Board members including Nintendo executive Reginald Fils-Aimé, former Activision Publishing president Kathy Vrabeck and Hestia Capital founder and chief investment officer Kurtis J. Wolf have also announced departure plans.
Cohen has been beefing up the incoming GameStop leadership team with executives whose primary focus has been in the e-commerce space, including Amazon veterans Elliott Wilke, Jenna Owens and Matt Francis, who will serve as GameStop's chief growth officer, operating officer and first chief technology officer, respectively.
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Following the shareholder meeting, GameStop will release its first–quarter earnings results for 2021 after the bell Wednesday.
In April, the company reported preliminary year-over-year global sales growth of approximately 11% for the first nine weeks of 2021. Sales increased approximately 5.3% year-over-year for the four week period ending February 27 and roughly 18% year-over-year for the five week period ending April 2.
The company noted that ongoing government mandated restrictions in response to the COVID-19 pandemic limited operations, primarily in Europe, during the quarter. GameStop says it operated with an approximately 13% decrease in the store base due to its "strategic store optimization efforts."
Zacks Research forecasts GameStop's first quarter revenues will increase 14.6% year-over-year to $1.17 million, with an estimated loss of 56 cents per share. GameStop executives will hold the company's quarterly earnings call at 5 p.m. to discuss the results.
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