{"id":19705,"date":"2023-06-07T22:03:11","date_gmt":"2023-06-08T02:03:11","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/gamestop-fires-ceo-elects-ryan-cohen-as-executive-chairman-stock-plunges\/"},"modified":"2023-06-07T22:03:12","modified_gmt":"2023-06-08T02:03:12","slug":"gamestop-fires-ceo-elects-ryan-cohen-as-executive-chairman-stock-plunges","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=19705","title":{"rendered":"GameStop fires CEO, elects Ryan Cohen as executive chairman; stock plunges"},"content":{"rendered":"
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GameStop Corp. fired Chief Executive Matthew Furlong on Wednesday and said that its board had elected activist investor Ryan Cohen as its executive chairman, effective immediately.<\/p>\n

Shares of the videogame retailer and meme stock sank 19% after hours following a brief press release detailing the move. That release did not offer a reason for Furlong\u2019s firing and was made shortly ahead of the chain\u2019s quarterly results. <\/p>\n

\n

Cohen, in a tweet<\/a> shortly after the announcement, said: \u201cNot for long.\u201d <\/p>\n

GameStop
\n GME,
\n +5.75%<\/bg-quote>,<\/span>
\n in its quarterly earnings release, said it would not be holding a conference call to discuss those results. But in a filing detailing those financials, the company said Cohen\u2019s leadership would be good for shareholders. <\/p>\n

\u201cWe believe the combination of these efforts to stabilize and optimize our core business and achieve sustained profitability while also focusing on capital allocation under Mr. Cohen\u2019s leadership will further unlock long-term value creation for our stockholders,\u201d GameStop said. <\/p>\n

Cohen, the co-founder and former CEO of online pet-supplies retailer Chewy Inc.
\n CHWY,
\n -4.10%<\/bg-quote>,<\/span>
\n became GameStop\u2019s board chairman in 2021, after joining the board that year and building up a stake in the company earlier. His influence at the company, as the Wall Street Journal reported in 2021, led to feuding with management and an explosion in popularity among the meme traders who helped launch GameStop\u2019s stock higher. He also amassed and then sold off a stake in meme stock Bed Bath & Beyond, the home-goods retailer that is in the process of closing up shop.<\/p>\n

GameStop announced the move on Wednesday as it struggles to put up a consistent profit and tries to cut costs. Under Cohen\u2019s control, the company has redoubled its focus on physical stores \u2014 as more of the gaming industry becomes more online and mobile \u2014 after initially making a bigger push toward e-commerce. <\/p>\n

GameStop, in a separate filing on Wednesday, said Cohen\u2019s responsibilities would include \u201ccapital allocation, evaluating potential investments and acquisitions, and overseeing the managers of the company\u2019s holdings.\u201d <\/p>\n

In that filing, GameStop said that Furlong was fired without cause. According to his offer letter in 2021, Furlong is due any unvested stock that would have vested in the next six months. According to the terms outlined in that letter, Furlong would have been eligible to receive nearly $2.5 million in stock in August. He\u2019ll also receive $100,000 in base salary. The filing also said Furlong had resigned as a company director.<\/p>\n

Furlong was named GameStop\u2019s CEO almost exactly two years ago.<\/p>\n

The company also said it appointed Mark Robinson as its general manager and principal executive officer. Robinson has worked as vice president and general counsel at the company since January 2022, and held other roles at GameStop since 2015, the filing said. <\/p>\n

GameStop also said it appointed Alain Attal as the lead independent director of the board and dissolved the Strategic Planning and Capital Allocation Committee.<\/p>\n

For its first quarter, GameStop reported a net loss of $50.5 million, or 17 cents a share \u2014 far narrower than the $157.9 million, or 52 cents a share, in the same quarter last year. Net sales were $1.24 billion, down from $1.38 billion in the prior-year quarter. GameStop ended the quarter with cash and cash equivalents of $1.06 billion. <\/p>\n

Popular videogames, such as \u201cThe Legend of Zelda: Tears of the Kingdom\u201d and \u201cHogwarts Legacy,\u201d seem likely to help GameStop\u2019s sales up ahead. And the company has cut costs in an effort to improve profitability. <\/p>\n

The company reported a profit in the prior quarter, helped by holiday-season demand. Still, the two analysts polled by FactSet don\u2019t expect another profitable quarter until this year\u2019s holiday quarter. <\/p>\n

Wedbush analyst Michael Pachter, in a note last week, noted that broader challenges for the retailer include \u201ca shift towards digital, mobile and subscription software (and away from the traditional packaged business).\u201d<\/p>\n

GameStop shares are down 29% over the past 12 months. By comparison, the S&P 500 Index
\n SPX,
\n -0.38%<\/bg-quote>
\n is up 2.7% over that period. <\/p>\n

Jeremy Owens contributed to this story.<\/em> <\/p>\n<\/p><\/div>\n<\/div>\n