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GameStop stock rises on CEO resignation announcement

Yahoo Finance’s Julie Hyman, Brian Sozzi, and Myles Udland discuss what GameStop CEO George Sherman’s resignation means for the company.

Video transcript

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MYLES UDLAND: All right, welcome back to "Yahoo Finance." On this Monday morning, stocks are low, but one name on the move higher is GameStop. That stock is up more than 8% in early trading on this Monday morning. And we got a couple pieces of news crossing the tape.

The most notable today, news that GameStop CEO George Sherman would step down at the end of July and really bringing what's been an ongoing overhaul of the C-suite over there at GameStop with Ryan Cohen and the activists that have been involved in that name. Really brings it to completion.

So Julie, when we get to August, which is pretty much the one-year anniversary of when Reddit really started getting excited about what Keith Gill was doing, and we'll get to him in just a second, the stock was, I think, about 4 bucks a share August 2020. Right now trading in the mid-hundreds. And it's going to be a completely different company, perhaps, really coming around to delivering on the promise that those deep value folks saw in GameStop.

I think the promise was, again, maybe, like, 50 bucks a share. But, hey, three times that, you know, good for them.

JULIE HYMAN: I mean, you know, it's going to be a completely different company in terms of who's sitting in the driver's seat. But will it actually be a completely different company in terms of end market demand, in terms of its relationship with customers? I mean, we have an a-- we happen to have an avid gamer on the production team here who says that's really one of the cruxes of the issue with GameStop, is that it's not necessarily a store that you want to go into, right? It's a sort of reluctant relationship.

And even though they are shuffling the management there, unless they can maybe fix that problem, the actual value, which is, of course, still debatable in this company, is not necessarily going to be realized. So I think that's really what's at stake here and all of the hopes invested in this. I mean, eventually, they're going to have to deliver, right? Or are they? I don't know.

It would seem, in a logical world, that they would be forced to deliver at some point. But we're not necessarily living in a logical world.

BRIAN SOZZI: You know, what bothers me here, among many things, with this news is that they're using a third party to find a new CEO, which tells you that GameStop doesn't have the talent inside the company, perhaps, at any level for someone to step up here, at least to get a shot. So much so because it really reflects all the turnover and all the change at the company over the past five years.

They now have to go outside the company. That's problem one. Because any new CEO is going to have to work with these top 50 executives at the company. Number two, you are probably concerned about what executive is going to come to GameStop. It's unlikely GameStop wants a retired retail CEO.

It's likely an up and coming person in retail will get this position, which suggests they will be somewhat inexperienced for this position. But again, perhaps, maybe this is what Ryan Cohen wants, to mold a CEO while he's essentially pulling the strings. In an effect, he's the CEO in addition to the chairman.

MYLES UDLAND: Well, I was going to say, Sozzi, I mean, Ryan Cohen has had his own career cofounding Chewy, among other ventures. He will be the chairman-- he's nominated, he's up for nomination to be the chairman of the board. One wonders why he is not the CEO. Though, of course, this third party they hired could ultimately say that he is the person they think is best for the job.

And, you know, as a member of the board, we'll see kind of how that goes. Another one for you, Sozzi, a Sozzi special, is someone who's currently maybe looking for another opportunity. Katrina Lake could step in as the next CEO of GameStop. You know, no longer CEO over at Stitch Fix, got that news last week.

BRIAN SOZZI: I'll push back slightly on that.

MYLES UDLAND: She's still on the board, though.

BRIAN SOZZI: Katrina Lake, yeah, she's going to be the executive chairman. I'll toss another curveball to you, Myles, someone who is looking for a new job, Jill Soltau. She was just given the ax over at JCPenney. I think she had a lot of good ideas. JCPenney is a sinking dying ship.

So she could have put a lot of those new ideas to work. There's a lot of cash over there at GameStop. And she is still seen as a forward-thinking retail executive. Hopefully they give her a ring.

MYLES UDLAND: Look, want to go ex-JCPenney folks, Ron Johnson. Let's throw him in there. Come on, bring him back.

JULIE HYMAN: That was the thought I had too, Myles. Why not? Let's just say a bunch of old retail names.

MYLES UDLAND: Exactly, exactly. And just one name is-- Sozzi, you talk about cash, one name that we did mention earlier, you want to bring up Keith Gill, Roaring Kitty, everyone's favorite congressional witness from 2021. News over the weekend, according to his screenshot verified by some other outlets, he exercised all his outstanding options on GameStop.

So he is now the owner, the beneficial owner, as he would say in the business, of 200,000 shares worth about $30 million. He's also got a couple million dollars in cash in his portfolio. So--

BRIAN SOZZI: Maybe he should be CEO.

MYLES UDLAND: --Roaring Kitty, all in GameStop. Been in a-- yeah, I mean, I was going to say, maybe Keith Gill could be the CEO, but Sozzi, I think he's made too much money on this thing to incentivize him to come take on the pain of having to actually run the business. All he was was really right on the stock and has done better than he ever could have imagined.

So why would he want to actually get a job to do this? That's way too much work. Way too much. Maybe you.

BRIAN SOZZI: He could work on the store.

MYLES UDLAND: Maybe you, Brian Sozzi. You, Brian Sozzi, you'll probably take the job for less than $30 million. So--

BRIAN SOZZI: I you have no comment on that.

MYLES UDLAND: --we'll see if Ryan Cohen wants to go all in for that. All right--