GameStop Executives Sitting on $1.3 Billion Gain From FrenzyJanuary 29, 2021
GameStop Corp.’s manic ride is transforming the fortunes of its leaders — at least on paper.
The video-game retailer’s top executives have seen the value of their holdings surge about $1.3 billion in the wake of a Reddit-fueled trading frenzy that has sent GameStop shares soaring more than 1,500% this month, according to data compiled by Bloomberg.
Chief Executive Officer George Sherman has the biggest holding among the company’s senior employees, with stock awards expected to vest over the next few years that were worth more than $700 million as of 10:45 a.m. in New York. Chief Financial Officer James Bell owns a stake valued at about $170 million, while Chief Customer Officer Frank Hamlin’s is worth more than $120 million.
Some of the awards are tied to the company’s performance, and for executives to realize those payouts, GameStop would need to maintain its frothy share price. The rally has inflated GameStop’s market value to more than $20 billion from $1.3 billion at the end of 2020 even as the retailer’s sales fell 22% in its last fiscal year and the company lost $471 million.
Read more: GameStop Staff Making $11 an Hour Miss Out on Rally’s Spoils
A GameStop representative didn’t immediately respond to a request for comment.
GameStop is among the companies that havesurged lately as investors continue a relentless buying spree of heavily shorted stocks touted on Reddit forum WallStreetBets. While the focus of the forum’s campaign has been hedge funds that shorted the companies’ shares, some of the more outspoken Reddit traders have portrayed their efforts as taking a populist stand against generational inequality and bail-outs of the wealthy.
The firm’s shares were up $77% to $342 at 12:17 p.m. in New York.
Other beneficiaries of GameStop’s rise include Chewy Inc. co-founder Ryan Cohen, who joined the company’s board this month after building a 13% stake worth more than $2 billion, according to theBloomberg Billionaires Index. The run-up has also boosted the wealth of Donald Foss, founder of subprime auto lender Credit Acceptance Corp., who owns a stake in GameStop worth about $1.1 billion.
GameStop board members other than Cohen have added almost $175 million to the paper value of their holdings since early January. A group of directors offloaded shares worth about $20 million in the week Cohen joined the board.
The Grapevine, Texas-based company’s shares have since jumped more than 500%.
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