GameStop (GME) shares surged Monday by as much as 10% in early trading following news that the video game retailer's CEO George Sherman is stepping down by July 31 after just two years on the job. The stock was still up 6.26% as of market close on Monday.
The news also follows moves by investor Keith Gill, who goes by "RoaringKitty" and "DeepF—ingValue" online, in which he exercised 500 call options on GameStop's stock at $12 giving him 50,000 additional shares, according to Bloomberg.
Gill also bought up another 50,000 shares of the company, bringing his total stake to 200,000 shares, or more than $33 million.
GameStop has been the king of the so-called meme stocks including AMC (AMC) and Bed Bath & Beyond (BBBY) that took off as retail investors piled into the market amid the pandemic. Members of the Reddit board r/WallStreetBets were particularly heavy investors in GameStop, pushing the stock up more than 3,000% in the last 12 months.
The trading frenzy spurred the trading platform Robinhood to temporarily halt buying of GameStop in January. The next month, the House Financial Services Committee held a hearing grilling various participants in the GameStop saga, including "Roaring Kitty" himself as well as the CEOs of Robinhood and Reddit.
Also in February, Gill was hit with a proposed class action lawsuit claiming he misrepresented himself as an amateur investor, despite previously working in the financial services industry. Gill maintains he did not provide any investing advice during his YouTube broadcasts, in which he discussed his GameStop investments.
Gill, and other investors, say they believe in GameStop's proposed turnaround plan, that will see the ailing brick and mortar retailer transform its business model to one that pushes more digital sales. The plan also calls for the company to expand its product offerings into spaces tangential to gaming including TVs, monitors, and other gaming accessories.
Fundamental to that strategy is incoming GameStop chairman and Chewy (CHWY) cofounder Ryan Cohen, an activist investor in the retailer. Cohen's expertise in online sales is expected to be key to the company's future plans.
GameStop reported its Q4 earnings last month falling short of Wall Street expectations, with net sales down year-over-year from $2.19 billion in Q4 2019 to $2.12 billion. Online sales, however, increased 175%.
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