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GameStop Executives Staring At Millions In Payouts On Vested Stock – Report
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GameStop Executives Staring At Millions In Payouts On Vested Stock – Report

Four GameStop executives are in for a massive payout upon departing the video game retailer. The Wall Street Journal reports that the executives could walk away with vested stock valued at about $290 million as of April 23.

Agreements signed between the company and the executives have provisions that let the executives redeem stock awarded during their tenure. The fortunes that these executives stand to walk away with underscores the unusual rise in GameStop’s (GME) market value over the past year.

Among those in for a huge payout is current CEO George Sherman, who is set to step down by July 31. His exit will result in the vesting of more than 1.1 million shares valued at about $169 million as of last week. According to the Wall Street Journal, Sherman is one of the largest shareholders, with a 2.4% stake in GameStop.

Shares held by former finance Chief James Bell vested on April 1, were valued at about $43.6 million last week. The Wall Street Journal also reports that former Chief Customer Officer Frank Hamlin, who resigned last month, had shares vested on April 7 valued at about $33.5 million as of Friday last week. Chris Homeister, who is set to resign as merchandising chief, has nearly 289,000 shares valued at about $43.6 million and poised to vest as soon as he steps down.

GameStop Shares are up more than 700% year to date after a 200% pop in 2020. (See GameStop stock analysis on TipRanks).

Amid the management changes taking place at GameStop, BofA Securities analyst Curtis Nagle believes the company is very far from executing a turnaround.

“GME has also turned over a significant portion of the management with several new executives that have meaningful digital and eCommerce experience. However, we think that GME is still a very long way from executing a turnaround,” Nagle stated.

The analyst has since reiterated a Sell rating on the stock with a $10 price target implying 94% downside potential to current levels.

Consensus among analysts is that GameStop is a Moderate Sell based on 2 Hold and 4 Sell ratings. The average analyst price target of $53.80 implies 66% downside potential to current levels.

GME scores 6 out of 10 on the TipRanks’ Smart Score rating system, suggesting its performance is likely to align with market expectations.

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