Rod Alzmann and Joe Fonicello of GMEdd․com collaborated with acclaimed director Jonah Tulis to share the story of the foundation of GMEdd.com alongside the stock market frenzy surrounding GameStop shares.

In January 2021, video game retailer GameStop had been the top story on every news network in the world. GameStop’s shares had risen over 2,500% amidst a wild flurry of volatility, netting enormous gains to investors and costing short sellers billions in the process.

But this wasn’t the whole story. The frenzy was the result of a battle that has been brewing for years; a chronicle of a band of contrarians who resisted conventional wisdom to bet on their own research, on a business that Wall Street had given up on.

Tulis states, “I talked to anyone and everyone and soon discovered there was a group of people who had been in on GameStop since early-2019, when the stock was in the low single digits. Not only that, these people all met online and sort of became a makeshift investors club.” 

The feature is told like a “campfire story,” by the people who lived it, in the moment, with no narrators or pundits giving a basic overview. 

GAMESTOP: RISE OF THE PLAYERS will feature familiar faces to dedicated retail investors in the stock, including but not limited to, Justin Dopierala, Farris Husseini, Rod Alzmann, and Joe Fonicello.

By day, Rod Alzmann worked as a corporate strategist for a Fortune 500 transportation & logistics company; and by night he served as the unofficial “Chief Strategist for a contrarian crew of GameStop investors,” per film producer Blake Harris. After years of pulling from a seemingly endless bag of unorthodox ideas, Alzmann would eventually become the “face” of GameStop’s army of retail investors, as a staple on Bloomberg and other financial programming.

Joe Fonicello attended the University of Connecticut and with an uncertain future awaiting him—made even more uncertain when COVID hits—Fonicello decides to travel the country in a Sprinter van and finish his senior year remotely. Along the way, he discovers the “GameStop thesis” and his life changes forever, as he begins digging deep into the retailer and spreading the word via social media, joining forces with Rod Alzmann to turn GMEdd.com into the ultimate one-stop-shop for crowd-sourced due diligence on Wall Street’s anti-darling.

The documentary will also feature Dmitriy Kozin, Farris Husseini, Jenn Kruza, Tom Barton, Jeff Tarzia, Abbe Minor, Justin Dopierala, Rigoberto Alcaraz, and infamous short seller Andrew Left.

GAMESTOP: RISE OF THE PLAYERS arrives in theatres on January 28th, 2022. For tickets and availability, visit Fandago.com.

While GameStop’s evolution into a digital-first technology company is only beginning, the prologue is worth understanding, and we believe the documentary works to paint a truthful and entertaining picture.

As a disclaimer, Rod Alzmann and Joe Fonicello of GMEdd.com volunteered their time to be interviewed for this project, to ensure the factual story was told and represented fairly. Thank you to all of our readers for supporting us.

Join GMEdd.com’s Official chatroom to discuss this article, GameStop’s transformation, and more.

Following the WSJ Exclusive that revealed to the public GameStop’s plans to expand into the NFT market, Barron’s has reported GameStop considered acquiring Loopring.

GMEdd.com first published source code from Loopring’s GitHub repository in October that confirmed the highly-speculated NFT Marketplace partnership amongst the ambitious pioneers was in development.

Prior to this, digital breadcrumbs had led us to that same point, detailing how Loopring has the technology that GameStop would require to bridge traditional e-commerce and blockchain and engineer the revolution of gaming.

the second layer

Connor Smith of Barron’s has corroborated The Wall Street Journal’s claims that GameStop is moving on blockchain partnerships, revealing that GameStop’s crypto plans have been in the works for months, the source told Barron’s, adding that the company has retained top crypto advisors to support its efforts.

When Barron’s questioned the source familiar with matters at GameStop about the Loopring speculation, the source stated that GameStop explored an acquisition of Loopring, but ultimately withdrew from talks amid logistical concerns related to Loopring’s operations in China.

Connor Smith’s tweet on January 6, 2022

Reddit users for months have speculated on whether GameStop had plans to launch something with decentralized financial company Loopring, which backs the LRC token. The person confirmed GameStop explored an acquisition, but said the retailer ultimately withdrew from talks amid logistical concerns related to Loopring’s operations in China.

Barron’s reports that a Loopring representative was not immediately available for comment, although GMEdd.com notes that back in November, Loopring CEO Daniel Wang stated he ‘could not comment on that’ anyway when asked by a reporter about the decentralized finance company’s rumored deal with GameStop.

GameStop withdrawing from acquiring Loopring Technology Limited does not prevent them from utilizing Loopring’s zkRollup Layer2 protocol to power their NFT Marketplace.

Read the full article, ‘GameStop stock surges on nft and crypto plans’ at barron’s

Source: Connor Smith at Barron’s

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After GameStop shares fell to their lowest intraday price since February, the Wall Street Journal reported after-hours that sources at the company claim GameStop’s expansion into the NFT and cryptocurrency markets is launching later this year.

The Wall Street Journal has announced that GameStop is launching a division to develop a marketplace for non-fungible tokens and establish cryptocurrency partnerships, according to people familiar with its plans, pushing the company into much-hyped areas as it tries to turn around its core business.

The retailer has hired more than 20 people to run the unit, which is building an online hub for buying, selling and trading NFTs of virtual videogame goods such as avatar outfits and weapons, according to the people. The company is asking select game developers and publishers to list NFTs on its marketplace when it launches later this year, the people said.

GameStop also is close to signing partnerships with two crypto companies to share technology and co-invest in the development of games that use blockchain and NFT technology, as well as other NFT-related projects, the people said. The retailer expects to enter into similar agreements with a dozen or more crypto companies and invest tens of millions of dollars in them this year, the people said.

By getting into the crypto and NFT space while it is still in its infancy, GameStop hopes to avoid missing out on opportunities to be part of a budding trend as it did with computer-game downloads about a decade ago, the people familiar with its plans said. 

The Wall Street Journal spoke to current and former GameStop board members to break the news on conclusions GMEdd drew four months ago. 

The story GameStop’s Power Player: How Outsider Ryan Cohen Wrested Control by Sarah E. Needleman at the Wall Street Journal released today describes an inside look at how the founder of Chewy took over a struggling gaming retailer.

Strikingly enough, GMEdd already published most of these details by analyzing digital breadcrumbs, without speaking to any confidential sources.

The story begins in 2019

Back in May, GMEdd.com revealed that Ryan Cohen had started to build his GameStop position as early as 2019, which has now been discovered by the Wall Street Journal.

To recap, the company was hoping for a buyout after years of unfruitful executive shakeups.

In early 2019, GameStop tried and failed to sell itself after years of stagnant growth and corporate strategy missteps. That spring, it hired a new CEO, George Sherman, a veteran of retailers including Advance Auto Parts. Mr. Sherman was GameStop’s fifth CEO in less than two years. Later in 2019, Mr. Cohen began building his stake. [WSJ,  Aug. 12 2021]

The WSJ now reports that Ryan Cohen’s swift accumulation of power at GameStop was orchestrated from his Florida beachfront apartment as the result of a series of previously unreported moves, people familiar with the matter said.

August 2020 ownership disclosure by Ryan Cohen and RC Ventures.

In May, GMEdd wraps up the history of Ryan Cohen’s initial GameStop strategy as:

Ryan Cohen started buying into GameStop in April of 2019, with a disclosure following increased holdings in August 2020. It’s unknown as to when he made the decision and how much time was spent beforehand figuring out activist investor logistics coinciding with a PR blitz, but it is reasonable to assume he was strategically building public-facing credibility for himself before revealing his high-stakes investment. [GMEdd, May 29 2021]

Have a seat

The WSJ reports that as GameStop’s board learned of Ryan Cohen’s stock purchases the directors offered him a board seat, according to current and former board members.

This aligns with the detail pointed out by GMEdd’s own Rod Alzmann that GameStop’s Investor Relations had referred to Ryan Cohen as a great shareholder since April of 2019.

Rod Alzmann’s rough notes after speaking to GameStop IR in late 2020.

The confidential sources claim that Cohen turned down the entreaty, telling directors that a sole board seat would give him no meaningful influence over decision making.

In November, Ryan Cohen released his famous letter stating just that.

According to these sources, the board responded to Cohen’s November 2020 letter by hosting a private call with the activist investor.

kill the cash cushion

The WSJ reports that Cohen erupted the following month when GameStop said it would sell $100 million in new stock.

Directors claim that the topic hadn’t come up on his call with the board.

Cohen, a 12.9% shareholder of GameStop at the time, reportedly worried the plan would damage the company’s standing among investors by reducing the value of existing shares.

The confidential source reveals that in response, Cohen wrote an email to GameStop’s then-chairwoman, Kathy Vrabeck, warning her that he would go public with his disapproval if the company proceeded with the sale.

Verbatim, we imagine the email went something like this.

Cohen urged her to share the email with other directors, people familiar with the matter said. The company shortly after scuttled the planned stock sale, for reasons undisclosed.

A former board member claims that Cohen made a significant power move here.

The ill-timed stock offering created a wedge and he used it to his advantage.

Reportedly leery of a prolonged fight and open to new ideas to improve the business, the board invited Cohen and his former business partners Jim Grube and Alan Attal to join in January.

“Welcome” aboard

The sources claim that Ryan Cohen approached his first board meeting, held over videoconference that same month, as a blitz.

Cohen also attended the Annual Shareholders Meeting via videoconference in June.

In his first meeting on the board, Cohen reportedly proposed the formation of a new committee to review GameStop’s strategy for spending and hiring.

Cohen requested this committee consist of himself, fellow activist investor Kurt Wolf and former Chewy executive Alan Attal. Some members of the board said they worried about permitting Cohen so much power on subjects of day-to-day management, but the proposal was approved.

GameStop announced the committee via News Release on March 8th.

The WSJ reports that Mr. Cohen proceeded to personally recruit new talent, including executives from Amazon.com Inc., Alphabet Inc.’s Google, and Chewy, all big names that GMEdd has been tracking hires from since May.

Cohen reportedly countered other executives that questioned his decisions, telling them that “the pace of change needed to quicken.”

In an instance shared by people familiar with the matter, Ryan Cohen asked a company executive to sign a deal to lease a new fulfillment center, hoping to speed up delivery times for customers’ online orders.

The executive reportedly pushed back with the belief that such a request from a director was unusual and against company policy that called for such contracts to undergo vetting that included multiple executives. The project later moved forward.

Sudden rise

GameStop directors were reportedly concerned about the sudden rise in valuation.

The board debated whether to discuss it publicly and whether the stock volatility could lead to shareholder lawsuits, current and former directors said.

Few directors other than Mr. Cohen were familiar with Reddit, the social network where speculative investors began to conjugate, board members said.

GameStop quickly became Reddit’s stock market darling.

The WSJ reports that Ryan Cohen’s rapidly-growing celebrity status, combined with his tendency to dabble in the company’s operations, earned him fans neither in the boardroom nor among GameStop’s executive ranks.

“Ryan personified a hero against the hedge funds,” a former board member said

One GameStop director, PetSmart Inc. chief executive J.K. Symancyk, on multiple occasions told board members that Chewy under Mr. Cohen was unprofitable and later required a full information-technology overhaul, according to people familiar with the discussions.

Several directors interpreted the remarks from Mr. Symancyk, who met Mr. Cohen in the process of joining PetSmart, as criticism. Others reportedly viewed the commentaries as matter-of-fact descriptions.

Get the bell out

In an effort to gain more control of GameStop’s spending,  Cohen pushed for finance chief Jim Bell to be the first senior executive to go, people familiar with the matter said.

It worked.

On February 23rd, 2021, GameStop announced Jim Bell’s resignation via News Release.

A handful of top executives, including CEO George Sherman, considered stepping down and claiming their contracts had been breached because of the reduction in their duties due to the board member’s involvement in corporate affairs, a person familiar with the matter said. 

The WSJ reports that the new board member was brash and outspoken, while George Sherman, 60, tended to keep to himself, people who know them both said. 

Though Mr. Sherman worked through most of the pandemic in GameStop’s Texas headquarters, it was Mr. Cohen, on all-hours video calls from his apartment, who called many of the shots, according to board members.

On top of this, new employees, likely appointed by Cohen, frequently sought out the brash new board member directly with questions about the business or operations, bypassing the CEO, people familiar said.

Ryan Cohen encouraged Mr. Sherman to step aside, and in April he agreed.

George Sherman officially departed GameStop in June.

In private conversations, Cohen reportedly expressed shock that even executives with relatively short tenures could leave with lucrative stock awards.

Moving Forward

In conversations with directors and executives, the new Chairman emphasized improving the experience for GameStop customers, predicting that gamers will support the company if it provides better service, competitive prices and faster shipping.

The WSJ claims that people familiar with the matter said that through midsummer, GameStop has hired more than 80 new employees with technology experience.

Huh. Wonder where they got that data.

View GMEdd’s latest tech hire report, detailing over 100 tech hires, at GMEdd’s Reports and Model page.

While the former board had intentions to sell shares at sub-$20 for an insignificant cash cushion, Ryan Cohen has raised more than $1.6 billion at greater than $200 per share, eliminating the company’s long-term debt and funding a transformation that will be studied in business schools for decades.

Power to the players.

Source: Wall Street Journal

On Tuesday, July 27th, the S&P Dow Jones Indices has announced that GameStop is set to join the S&P MidCap 400, effective August 4th.

S&P SmallCap 600 constituent GameStop Corp. (NYSE:GME) will replace Weingarten Realty Investors (NYSE:WRI) in the S&P MidCap 400.

Lakeland Financial Corp. (NASD:LKFN) will replace GameStop in the S&P SmallCap 600.

These changes are effective prior to the opening of trading on Wednesday, August 4.

The S&P 400 index serves as a barometer for the U.S. mid-cap equities sector and is the most widely followed mid-cap index.

The Standard & Poors  July 27, 2021 Press Release

The S&P MidCap 400® provides investors with a benchmark for mid-sized companies. The index, which is distinct from the large-cap S&P 500®, is designed to measure the performance of 400 mid-sized companies, reflecting the distinctive risk and return characteristics of this market segment.

Standard & Poors states that mid-cap exposure generally captures a phase in the typical corporate life cycle in which firms have successfully navigated the challenges specific to small companies, such as raising initial capital and managing early growth.

At the same time, mid caps tend to be quite dynamic and not so large that continued growth is unattainable.

Source: Standard & Poors Press Release

This morning, Olga Kharif  and Anders Melin of Bloomberg have published an article that details Ryan Cohen‘s past success with Chewy and the talent he, along with his team, bring to GameStop.

The article mentions how Cohen, who takes over as chairman in June, has brought in several of his old Chewy cohorts to help execute his plan, including the mastermind of the customer-service program, Kelli Durkin.

Cohen’s goal is to push the company rapidly into e-commerce, and according to people familiar with his thinking, he plans to borrow heavily from the model he implemented at Chewy to pull off that transition.

The piece also mentions Cohen’s personal background, regarding his lack of a college education and the path of his father inspiring his demeanor.

Cohen, who was born in Montreal, never went to college. He has credited much of his success building Chewy to his father, who ran a glassware business and died in 2019. In person, Cohen has a soft-spoken demeanor, revealing little of his shrewd business instincts and ability to drive bargains with suppliers, former colleagues say.

Kharif and Melin also delve into Cohen’s mischievous Twitter usage, something we have spent hours speculating on.

Cohen has embraced the mischievous spirit of Elon Musk as he pursues a GameStop comeback. Like Tesla Inc. ’s prankster-king, he posts goofy and sometimes mysterious images on social media (a poop emoji over a picture of a Blockbuster store or the stuffed bear from the movie “Ted” using a bong ). That’s helped him win over the Reddit crowd, which turned GameStop into a so-called meme stock.

While none of this is news to GMEdd readers, it is bullish to see the press picking up on the real story behind the  GameStop investment thesis.

Check out the article to read more

Source: Bloomberg

On April 15th, GMEdd.com Co-Proprietor Rod Alzmann spoke with Hedgeye Retail’s Jeremy McLean for a Hedgeye TV talk. Jeremy and Brian McGough over at Hedgeye Retail had placed $GME as their best idea long on December 17th, 2020

The retail investor duo shared their thoughts on GMEdd, Ryan Cohen, and GameStop’s path moving forward.