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GameStop CEO’s shares are worth nearly $1 billion—and, boy, does he probably want to sell

January 29, 2021, 6:25 PM UTC

The COVID-19 recession only worsened GameStop’s tailspin. At the onset of the pandemic, GameStop shut down stores across the nation. By April 2020, GameStop announced its CEO George Sherman would take a temporary 50% pay cut.

The company’s books don’t look pretty. Through the first three quarters of 2020, GameStop’s sales fell 31% to just under $3 billion, and it lost $296 million during that period. It closed more than 400 stores last year, and plans to close hundreds more in 2021.

But stock traders don’t seem to care: Despite no improvement to the company’s bottom line nor outlook, its stock (ticker: GME) is up 1925% this month as redditors (specifically subscribers to the r/wallstreetbets subreddit) and amateur investors chase online speculation. It opened Friday at $381.43 per share, up from $18.84 on Dec. 31.

That has made Sherman a very rich businessman—at least on paper. Sherman owns 2,361,670 shares of GameStop, according to Bloomberg. Those shares are worth $901 million as of Friday’s market open, up from $44 million on Dec. 31. On Wednesday, his GameStop holdings hit a staggering $1.1 billion when GME’s stock hit $469.

Sherman left his CEO role at Victra, an authorized retailer for Verizon Wireless with more than 1,000 retail stores, to join GameStop in 2019 at a starting salary at $1 million. By CEO standards, his salary was low. The GameStop board sweetened the pitch, awarding him stock options and grants valued at $10.5 million.

But there is a catch. Publicly traded companies usually restrict CEO stock-sales, limit them to pre-planned increments, or only allow them after getting board approval. It wouldn’t be a good market signal if CEOs were routinely selling their company shares. From the company’s proxy filings, it’s unclear if they have policies in place to prevent executives from selling, or whether Sherman will be able to cash in on this surge. The latest filings do not show any sales from Sherman—and GameStop hasn’t updated his share total since it filed its Form 4 on June, 9 2020.

Simply put: Economic reality could send GME’s stock price back to earth before Sherman can actually sell.