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GameStop CEO George Sherman to exit as video game retailer pivots to digital

House committee holds hearing on GameStop
House Financial Services committee holds hearing on GameStop stock drama 01:50

The overhaul in the top ranks of GameStop continues with the announced departure of CEO George Sherman at the end of July.

Less than two weeks ago, the Grapevine, Texas, company announced the nomination of Chewy founder Ryan Cohen as chairman of the board, a major investor in the floundering video game retailer. GameStop shares rose more than 7% in morning trade to $166.05.

Cohen had been buying huge stakes in the company and pushing for a digital transformation. GameStop has suffered as more gamers turn to digital downloads rather than the discs the chain sells on its shelves.

Cohen was joined by two of his former colleagues on the board.

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They're arrival coincided with the meteoric January rise of GameStop's shares in a bizarre market phenomenon that pitted smaller investors who banded online against major, institutional investors who had been shorting the stock, or betting it would fall below the $20 price level in January.

Shares of Gamestop now cost around $170, up 720% this year. At the end of a flurry of trading in January, the shares were close to $500 each.

Last month in a regulatory filing, GameStop said that it had and hired an executive headhunter as it evaluated company leadership and that its directors had spoken to potential candidates from gaming, e-commerce and technology sectors.

Earlier this month, GameStop said that it would sell up to 3.5 million of its shares, with the price still vastly elevated. The shares will be sold through an "at-the-market" offering, which allows companies to place their stock on the market over a period of time. 

The stock sale will allow the company to pay down hefty debts that it had accumulated as a technology shift led gamers to spend money online, rather than in GameStop stores.

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