GameStop has a new CEO in town.
The game retailing company recently announced it had fired its now-former CEO Matt Furlong and replaced him with Canadian investor Ryan Cohen for undisclosed reasons.
Furlong had been GameStop's CEO since 2021; he led the company past storms, such as when hedge funds bet against him and the company in the stock market.
GameStop has launched its NFT marketplace despite that chilly crypto winter.
GameStop's Changing of The Guard
GameStop stated that it had fired Matthew "Matt" Furlong from his position as the company's CEO and that he was replaced by Ryan Cohen, a Canadian investor who owns 10% of the company, per GameRant.
While companies changing CEOs is nothing strange, what it is that the company did not disclose the reason behind Furlong's sacking.
CNN tried asking GameStop to provide more information about Furlong's layoff, but it has yet to respond to the publication as of press time. However, it is highly possible that the company sacked Furlong due to his mismanagement of the company in recent times.
You may recall that GameStop has been losing revenue in the past few months; it previously revealed it saw a significant flop in its quarterly earnings during Q2 2022 to the tune of $1.18 billion, increasing its deficit to $108.7 million - $47.1 million larger than how much it lost in 2021.
More recently, the company revealed its revenue went down from $1.38 billion to $1.24 billion year-over-year, along with a net loss of $50.5 million, compared to a net loss of $157.9 million in Q1 2022.
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The company was also forced to lay off numerous employees to offset its expenses and the effects of the economic recession on the global economy. It laid off an undisclosed amount of employees in late July 2022, including its then-CFO, Mike Recupero.
Investors have also pushed the company's stock price down more than 20% in after-hours trading, with the price sitting at $26.11 per share as of press time, per Reuters.
As a result of Furlong's sudden sacking, the company will provide him with payments and benefits associated with a termination without cause.
Who Is Ryan Cohen?
Gamestop replaced Furlong with Cohen, who has been on the company's board as its chairman since 2021. His bet against portfolio managers in 2021 helped in preventing GameStop from going under while also attracting new investors (and even meme stock traders) to increase the price of GameStop's stock, per Reuters.
You may recall that many portfolio managers went bankrupt in 2021 due to the interference of the meme stock traders from Reddit's r/wallstreetbets. They created a short squeeze, preventing portfolio managers from earning anything and even losing money for betting against GameStop.
Some analysts are questioning if Cohen can turn GameStop around in its current state; analysts are concerned about its "revolving door" for coming and going executives, which reflects its "utter lack of strategy."
"They wanted to be like Amazon, and hired ... from Amazon in 2021," said Wedbush Securities analyst Michael Pachter.
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