GameStop (GME) - Get Free Report shares skyrocketed Monday after RC Ventures, an investment firm managed by Ryan Cohen, co-founder of online pet-supply retailer Chewy (CHWY) - Get Free Report, purchased a 9% stake in the beleaguered video-game retailer.
In a filing with the Securities and Exchange Commission, RC Ventures disclosed that it has 5.8 million shares of GameStop. That puts it behind only BlackRock and Fidelity, according to Bloomberg.
GameStop traded at $6.59, up 22.26%, and has risen 8% year to date, including Monday’s move.
Grapevine, Texas-based GameStop had 5,509 retail stores in the U.S., Canada, Europe, Australia and New Zealand as of Feb. 1. Store names include GameStop, EB Games, ThinkGeek and Micromania-Zing.
The company has had difficulties with the video-game industry’s shift to online distribution, but a new generation of console hardware starting this year is expected to help, according to Bloomberg.
In the fiscal 2020 first quarter ended May 2, GameStop posted a loss of $1.61 a share, which was 8 cents narrower than expected. Revenue of $1.02 billion fell 34% from a year earlier and missed estimates by $70 million.
Comparable-store sales also missed the mark, falling 30% vs. estimates of a 27.5% decline. Excluding closed stores, comparable sales still fell 17%.
Given that the videogame industry had its best March in 12 years and a record April, investors were likely looking for something more upbeat than this. That’s even as GameStop’s online sales jumped by a factor of six in the quarter.
But CEO George Sherman said in a statement that the company is “poised to capitalize on the hardware and software sales growth expected as several new software titles and next generation consoles are introduced later this year.”