One of the biggest stories of 2021 so far has been GameStop's rise on the stock market. Spurred on by a Reddit group trying to pinch short sellers, the story generated considerable media attention. It is such an unusual event that it should come as no surprise that movies are being made about the whole Reddit/GameStop fiasco. However, while all of this was unfolding publicly, there appears to be internal strife between shareholders and the company's Board of Directors.

GameStop's stock has been on a wild ride this year, with a rush of buys sending the stock upwards to $400 USD a share at one point. In recent days GameStop stock has made back some gains after falling, though where the stock price might settle is anyone's guess. But behind the scenes over the course of several years, two major shareholders, Hestia Capital Partners and Permit Capital, have been trying to fix GameStop while lambasting management for not cutting costs effectively and moving the business in the wrong direction, according to a report obtained by IGN.

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It is unusual that shareholders would take such an aggressive approach, but with a 7.2 percent combined stake in the company as of 2020, Hestia and Permit didn't want GameStop to fail. The two investment firms have filed proxies, which means the firms wanted to introduce outside candidates of their own choosing to take positions on the Board of Directors. Coupling this with a presentation to shareholders outlining GameStop's missteps, Hestia and Permit are making life difficult for the Board, which the firms reportedly see as not seeming to care about the company.

The presentation goes into detail pointing out negative public opinion of GameStop on social media platforms, the continued maintenance of a private jet, and a botched response to COVID-19. It points to a company that doesn't seem to have a clue what it is doing, yet it should be doing better considering video games are such a huge industry. Hestia and Permit might be seeing their criticism paying off, as GameStop CFO Jim Bell recently resigned and led to stock prices going up.

The investment firms and GameStop were at odds through much of 2020, with GameStop shooting back a response to Hestia and Permit's claims before getting hit again by the investors. IGN's reporting indicates that there is hope for GameStop yet, with plans to make GameStop locations more social spaces. The company forges ahead with Tax Day deals, but the tenuous relationship between shareholders and management shows GameStop has a lot of work to do to steady the ship.

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Source: IGN