Home Business News GameStop's strong stock performance triggered the departure of its board director

GameStop’s strong stock performance triggered the departure of its board director


© Reuters. FILE PHOTO: A GameStop store seen in New York City’s Jackson Heights neighborhood

By Svea Herbst-Bayliss

(Reuters) – Hestia Capital Partners CEO LP Kurt Wolf is involved GameStop Corp The board of (NYSE 🙂 to make the US video game retailer more valuable. After that, it became too valuable for him to continue.

Three people familiar with the matter said on Thursday the hedge fund manager resigned his post as director because his investors were worried about placing a bet on the company, which is profitable. on paper is 3,500%, has become too big and risky.

Giving up board seats allowed Wolf to sell GameStop shares to his investors without restrictions in order to meet repurchase requests, the sources said.

Hestia currently owns 318,600 GameStop shares worth about $ 53.8 million. It oversees $ 75.6 million in assets as of the end of March, with GameStop being the largest investment.

Hestia has a mission to invest in unloved and undervalued “deep value” assets. GameStop’s shares have risen sharply since January when amateur traders held on social media platforms like Reddit, making them unsuitable for the type of investment clients have. Hestia’s rental fund.

Sources say Hestia earned 223.7% in the first three months of 2021 after rising 162% last year and that Wolf now plans to sell GameStop shares.

Wolf did not respond to emails seeking comment. GameStop said in a filing on Thursday that Wolf’s resignation “was not the result of any disagreement with the company or the board of directors.” It declined to comment further.

Hestia initially invested in GameStop in 2019 with an average spending of $ 5 a share. A year later, when GameStop was valued at around $ 250 million, Wolf criticized the board for its poor strategic planning and capital allocation and requested a board seat for himself. GameStop shares are currently trading around $ 169, and the company is valued at around $ 12.5 billion.

Hestia’s largest investors are Hestia’s largest and have requested payback for the hedge fund investment with about a dozen small companies like Hestia. It invested with Hestia through a privately managed account and required Wolf to return control of the portfolio by the end of March. In January, Wolf sold around $ 20 million worth of GameStop shares on behalf of the blockchain when the share price was around $ 20 a share, the sources said.

A spokesman for Savingent Capital declined to comment.

Wolf joined GameStop’s board in June 2020. Within months, Ryan Cohen, co-founder and former CEO of online pet food retailer Chewy (NYSE 🙂 Inc, has joined Wolf’s board. Since then, he has led its pivot from traditional stores to e-commerce. GameStop said Thursday Cohen will become its board chairman later this year.

Disclaimer: Fusion Media wants to remind you that the data contained in this website is not necessarily real-time nor is it accurate. All CFDs (stocks, indices, futures) and Forex prices are not provided by exchanges but are provided by the market makers, so the prices may be inaccurate and available. may differ from actual market price, which means that price is indicative only and not suitable for trading purposes. Consequently, Fusion Media accepts no liability whatsoever for any transaction losses you may incur as a result of using this data.

Fusion Media or anyone associated with Fusion Media will not be liable in any way for loss or damage resulting from dependence on information including data, quotes, charts and buy / sell signals contained in the this site. Please be fully informed about the risks and costs associated with trading the financial markets, which is one of the riskiest investments possible.



RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular

Recent Comments