GameStop Looking To Boot George Sherman, Seek New CEO: Report

GameStop Corp GME is reportedly looking to oust CEO George Sherman and bring in a new corporate leader.

What Happened: The Dallas-based company is working with an executive recruitment firm to replace Sherman, according to a Reuters report citing “three people familiar with the matter.”

Sherman became CEO in April 2019 after serving as CEO at Victra, a Verizon VZ authorized retailer.

The CEO position at GameStop has been something of a revolving door over the past three years: J. Paul Raines who was promoted from chief operating officer to CEO in 2010, stepped down in January 2018 after being on medical leave for three months due to the reoccurrence of brain tumor; he passed away in March 2018.

Executive Vice President Michael K. Mauler became the new CEO in February 2018 but abrupt resigned three months later, citing "personal reasons." Shane Kim, a GameStop director and former Microsoft MSFT volunteered to become interim director, serving for nearly one year.

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Why It Matters: GameStop has been at the center of controversy this year as retail investors unexpectedly purchased large amounts of shares, forcing large hedge funds to cover short positions and the RobinHood online brokerage to abruptly suspended trading of GameStop and other stocks.

The company’s stock trading took on an oscilloscope quality as retail investors continued to buy shares in large volumes; the issue resulted in congressional inquiries on the stock market and renewed calls from some politicians including Sen. Elizabeth Warren (D-MA) for stricter Wall Street regulations.

The potential removal of Sherman as chief executive would be the second major management shift for GameStop this year, following January’s appointment of Ryan Cohen, the co-founder and former CEO of online pet food company Chewy Inc CHWY, to its board of directors.

GME Price Action: GameStop's stock was trading down 14% to $136.24 at publication time.

(Photo by Mike Mozart / Flickr Creative Commons.)