Ryan Cohen, the billionaire investor known for his involvement with GameStop and meme stock trading, has assumed the role of executive chairman after the video game retailer ousted its CEO and reported a larger-than-expected quarterly loss. The announcement led to a more than 20% drop in the company’s stock price during after-hours trading, continuing the volatile ride that began earlier in 2021 when retail investors rallied against hedge funds betting on GameStop’s downfall.
Questions arise as analysts ponder whether Cohen can successfully turn GameStop’s fortunes around, given his previous role as board chairman for the past two years. In a regulatory filing, GameStop stated that Cohen’s new executive function includes overseeing capital allocation, evaluating potential investments and acquisitions, and managing the company’s holdings. The filing did not disclose the reason for CEO Matt Furlong’s termination or whether a replacement is planned.
The filing revealed that Furlong was fired as CEO on Monday, the same day he resigned from the board. GameStop clarified that his departure was unrelated to any disagreement regarding the company’s operations. Furlong will receive the remaining payments and benefits specified in his CEO contract, subject to waiving any claims against the company.
Cohen, who achieved success with the online pet products retailer Chewy, joined GameStop’s board earlier this year and assumed the role of chairman in June. With aspirations to transform GameStop into a dominant e-commerce player, Cohen recruited several executives from Amazon. However, many of these hires have not remained with the company for long.
GameStop reported a 10% decline in net sales for the quarter ending in April, marking the fourth consecutive quarterly revenue decline. Since Furlong’s appointment, GameStop’s shares have experienced a significant decrease in value, with a total drop of over 50% and around 65% since June 2021. Cohen is currently the company’s largest investor.
The departure of previous top executives in short intervals has raised concerns among analysts, who highlight the lack of a clear strategy. Despite initially emphasizing e-commerce plans, Cohen has shifted focus to utilizing GameStop’s physical stores for order pickups alongside online sales.
GameStop has decided not to hold a conference call to discuss the quarter’s results.