GameStop (NYSE:GME) stock declined 6.5% yesterday and hit a new 52-week low of $15.26. Moreover, the videogame retailer has closed lower in the last three trading sessions since Ryan Cohen, an activist investor, was named the new CEO of GME. The drop might be due to investor concerns about the new leadership’s ability to improve the company’s performance.
Cohen and GME’s History
Cohen had bought a 9% stake in GameStop in August 2020 through his investment firm, RC Ventures. Later, the activist investor started pushing for the meme stock company’s overhaul and became a board member in January 2021. Following this, Cohen became GameStop’s Chairman in June 2021.
Not just investors, but also some analysts, are not pleased with Cohen’s appointment due to his prior failed attempts to improve the company’s prospects. Wedbush analyst Michael Pachter said Cohen initially wanted GME to be like Amazon (AMZN) and thus hired several senior AMZN employees only to sack them in less than two years’ time.
Next, Cohen treated GameStop as an NFT marketplace, but witnessed failure in this attempt too.
It is worth mentioning that Cohen’s appointment came after GameStop’s former CEO, Matthew Furlong, was fired in June 2023 for reasons undisclosed.
Is GME a Good Buy Right Now?
Patcher is the only analyst covering GameStop and has assigned a Sell rating to the stock. Also, the analyst’s price target of $6 on GME stock implies a downside of another 61% from the current level.
