Skip to main content

GameStop surges 28% after co-founder of Chewy.com pitches plan to turn it into Amazon rival, report says (GME)

FILE PHOTO: The GameStop store sign is seen at its shop in Westminster, Colorado January 14, 2014.   REUTERS/Rick Wilking       Reuters

Summary List Placement
  • GameStop surged 28% on Tuesday after a report from Bloomberg detailed a yet-to-be-revealed investment plan for the retailer to expand into ecommerce and rival Amazon.
  • Ryan Cohen, a co-founder of pet supplies ecommerce company Chewy.com, has acquired a near 10% stake in the video-game retailer and is holding talks with the board and several directors, according to Bloomberg.
  • Cohen's plan is for GameStop to begin selling and quickly shipping "a wide range of merchandise" to its customers, inline with one of Amazon's core strength.
  • Cohen is willing "to become more involved" in GameStop in order to "produce the best results for all shareholders," according to a regulatory filing.
  • Visit Business Insider's homepage for more stories.

GameStop surged on Tuesday after a report from Bloomberg detailed an investor's yet to be seen plan to turn the video-game retailer into an Amazon rival.

Ryan Cohen, co-founder of Chewy.com, wants to apply the same successes employed at the pet supply ecommerce retailer to GameStop, according to the report, which cited a person familiar with the matter.

That is, mainly, to sell a wider range of gaming related merchandise and services online, and to ship it to customers quickly, essentially replicating one of Amazon's many core strengths.

One example of an imitative Cohen is advocating for, according to Bloomberg, is for GameStop to allow customers to sell used games to the company online and ship them the used game rather than only being able to do that in a physical store.

Read more: Morgan Stanley's US equities chief nailed his call for a short-term market meltdown. He now lays out the evidence that it may not end soon — and shares 15 stocks to buy ahead of the rebound.

More game-streaming subscriptions is another avenue Cohen wants the company to explore offering, according to the report.

According to a regulatory filing, Cohen has amassed a 9.8% stake in GameStop and is willing "to become more involved" in the company inorder to "produce the best results for all shareholders.

It's unclear if GameStop will implement any of Cohen's proposals, Bloomberg said, though the motivation is clear: to avoid GameStop from suffering the same fate of many shuttered brick and mortar retail companies.

Shares of GameStop were already on the rise before today's move higher, as investors bid up the company in anticipation of a new cycle launch of next generation gaming consoles from Sony and Xbox.

GameStop is now up roughly 44% year-to-date, and surged as much as 28% to $11.17 on Tuesday.

Read more: US Investing Championship hopeful Tomas Claro hauled in a 409.1% return through August. Here's the unique trading strategy he's leveraging — and 3 stocks he's holding right now.

gamestop chart.JPGMarkets Insider

NOW WATCH: Why hurricanes hardly ever hit Europe

See Also:

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.