After GameStop Corp (GME.N) fired its CEO and recorded a larger-than-expected quarterly loss, billionaire investor Ryan Cohen became executive chairman on Wednesday.
After-hours trading sent the stock down more than 20%, continuing a roller-coaster trip in early 2021 when regular investors proved hedge funds incorrect about GameStop’s (GME.N) death.
Several experts doubt Cohen can save GameStop two years after becoming board chairperson. In a regulatory filing, GameStop claimed his new executive post allows him to allocate cash, evaluate investments and acquisitions, and manage the company’s holdings managers.
GameStop fired CEO Matt Furlong almost two years after returning him from Amazon.com (AMZN.O) in Australia.
GameStop did not reply to Reuters’ request for comment on Furlong’s firing or replacement. Cohen and his representative also declined comment.
The regulatory statement stated that Furlong was ousted as CEO and resigned from the board on Monday. GameStop said his board resignation “did not result from any disagreement with the company on any matter relating to the company’s operations, policies or practices.”
GameStop stated that Furlong would receive any remaining CEO contract payments and benefits if he waived any claims against the firm in a “timely” manner.
After Furlong’s dismissal on Wednesday, Cohen tweeted, “not for long.”
According to the statement, GameStop, worth $8 billion, appointed Cohen executive chairman on Wednesday and reduced its board from six to five directors.
GameStop’s senior lawyer, Mark Robinson, was appointed general manager with “oversight of other executive officers besides the executive chairman.” He answers Cohen.
Cohen, who made his fortune selling online pet supplies business Chewy (CHWY.N) for $3.5 billion in 2017, joined GameStop’s board in early 2021 and was elected chairman in June 2021.
Cohen hired Amazon executives to transform the company into an e-commerce giant. Many of Cohen’s network recruits have failed.
Cohen has also scaled back e-commerce efforts, relying more on GameStop’s physical locations to fulfill online orders.
GameStop reported a 10% drop in quarterly revenue to $1.24 billion on Wednesday.
After Furlong’s hiring, GameStop shares have dropped 65% since June 2021. Cohen is the biggest shareholder.
GameStop executives have left after short stints before Furlong. Former chief operating officer Jenna Owens left in October 2021, seven months after arriving, while former financial chief Michael Recupero, hired with Furlong, was fired last year.
The revolving door alarmed analysts.
“It shows statelessness. “They wanted to be Amazon and hired… from Amazon in 2021,” said Wedbush Securities analyst Michael Pachter.
GameStop will not have a quarterly conference call.
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