GameStop CEO involved in legal disputes, stock price falls below $20

According to the Financial Channel APP, despite GameStop (GME.US) stock price falling below the $20 mark, the company's CEO Ryan Cohen has recently become the focus of attention due to multiple legal disputes. As this company, once labeled a "meme stock," faces future uncertainties, will Cohen's controversies become a new focus diverting the attention of investors and management? Recently, the Federal Trade Commission (FTC) announced that Cohen will pay a civil penalty of $985,320 to settle charges of violating the Hart-Scott-Rodino Act (HSR Act). The act requires reporting to federal antitrust agencies when acquiring a certain size of company shares. According to the FTC's complaint, Cohen acquired over 562,000 voting securities of Wells Fargo without proper disclosure, surpassing the HSR Act reporting threshold.

The FTC pointed out that although Cohen's holdings were less than 10% of the issued voting securities, his acquisition did not qualify for the investment exemption under the HSR Act. The FTC documents mentioned that Cohen intentionally sought to influence Wells Fargo's business decisions through his share acquisitions, evidenced by emails he sent while vying for a board seat and communications with the bank's leadership post-acquisition.

Furthermore, Cohen and his company RC Ventures were sued by Bed Bath & Beyond (now a division of Beyond (BYON.US)) in August, accusing Cohen of trading on insider information and illegally profiting around $47 million. The lawsuit stated that during Cohen's tenure as a Bed Bath & Beyond director, he made dozens of trades on the company's stock, all resulting in profits.

Meanwhile, GameStop's management remains silent, focusing on financial reports, filing documents with the U.S. Securities and Exchange Commission, and actively formulating strategies. The company revealed that as part of achieving sustained profitability, GameStop will continue to evaluate its international assets and operations to determine strategic and financial alignment, while eliminating redundant and underperforming assets. Additionally, the company has initiated a review of its store portfolio optimization, potentially closing more stores than in the past few years.

Some investors speculate that besides driving profitability in GameStop's traditional business, Cohen may have other plans. On Wednesday, GameStop's stock price fell by 2.53% to close at $19.65, a decrease of about 70% from its 52-week high, nearing the 200-day moving average of $18.74. GameStop's historical highest closing price was $86.88 on January 27, 2021 (adjusted for stock splits)