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GameStop shareholder sells off stake valued at over $1 billion

Business

Value of one of GameStop’s newest board member’s stake spikes up nearly $3 billion in less than 3 weeks; CEO’s stake value increased almost $780 million over the same time

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Just because trading in a stock gets crazy enough to worry regulators, and may have nothing to do with a company’s fundamentals, doesn’t mean you can’t still make a lot of money, as long as you sell.

GameStop Corp. GME, -28.44% disclosed early Thursday that one of its largest shareholders, South Korea-based MUST Asset Management Inc., no longer held any shares of the videogame and consumer electronic retailer’s shares.

MUST had previously owned 3.3 million shares, or about 4.7% of the shares outstanding, which made it GameStop’s ninth largest shareholder, according to data provided by FactSet.

The 3.3 million-share stake was first disclosed before the March 20, 2020 open, when it represented 5.0% of the shares outstanding at the time.

GameStop’s stock had closed on March 19, 2020 at $4.19, which means 3.3 million shares would be worth about $13.8 million. At Wednesday’s closing price of $347.51, 3.3 million shares would be worth $1,15 billion, representing an increase of about $1.13 billion.

Good timing, as GameStop’s stock tumbled 21.6% in midday trading Thursday. The stock had skyrocketed 1,642% in two weeks through Wednesday, as the poster child of the of the recent trading frenzy over heavily shorted stocks.

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But MUST isn’t the only shareholder that saw the value of their stake get a billion-dollar boost in recent weeks.

Ryan Cohen, who manages activist investor RC Ventures LLC, which is GameStop’s second-largest shareholder, owned 9,001,000 shares, or 12.9% of the shares outstanding, according to a filing with the Securities and Exchange Commission before the Jan. 11 open. GameStop had also announced early Jan. 11 that it agreed with RC Ventures to add Cohen to its board of directors, as well as Alan Attal and Jim Grube.

Based on the Jan. 8 closing price of $17.69, Cohen’s stake was worth $159.2 million. As of Wednesday’s close, that stake would have been worth $3.13 billion, if Cohen sold.

With Thursday’s stock selloff, the value of Cohen’s stake has declined by $674.4 million, at current prices.

Cohen had been building his GameStop stake for the past five months. The company first disclosed on Aug. 28, 2020 that Cohen owned 5.8 million shares, or 9.0% of the shares outstanding. More recently, GameStop disclosed that Cohen bought about 1.2 million shares on Dec. 18.

When Cohen was named a director, GameStop Chief Executive George Sherman said: “We appreciate the constructive dialogue we have had with Ryan over the past several months. Together, we have reached an outcome that is in the best interest of all stockholders and can enable GameStop to accelerate efforts to deliver enhanced value for the company.”

Sherman is also one of GameStop’s largest shareholders, with about 2.4 million shares, or 3.4% of the shares outstanding.

The last filing disclosing Sherman’s stake was on June 11, 2020, when it was disclosed he acquired about 1.2 million shares through the grant of restricted shares. With the stock closing at $4.96 on June 9, his stake was worth about $11.7 million at the time.

Sherman’s stake was worth $742.5 million as of Wednesday’s close, but was now worth “only” ab out $643.7 million, at current prices.

GameStop shares have soared 2,206.1% over the past three months and 6,374.5% over the past 12 months, while the S&P 500 index SPX, +2.11% has gained 16.9% the past three months and rallied advanced 16.7% over the past year.