GameStop fires CEO, names Ryan Cohen executive chairman
GameStop, the Texas-based video game retailer, has fired CEO Matt Furlong just two years after hiring him and appointed billionaire Ryan Cohen as executive chairman. The news caused the company’s shares to fall by 20% in extended trading. Furlong, a former executive at Amazon, joined GameStop in 2021, just a few months after the company was at the center of a “meme-stock” trading frenzy. The company did not give a reason for Furlong’s termination, nor did it respond to a request for comment from Reuters seeking details. GameStop also announced that it would not be holding an earnings call.
Cohen, who co-founded online pet products retailer Chewy, has been serving as chairman of GameStop since 2021 and is a majority shareholder of the company. He has been driving GameStop’s transition into e-commerce and has been responsible for the shakeup in its top management, including hiring some former Amazon employees. Jenna Owens, the former COO, left the company in October 2021 just seven months after joining, and Michael Recupero, the former CFO, was terminated last year.
Michael Pachter, an analyst at Wedbush Securities, criticized the company’s lack of strategy, saying, “It reflects the utter lack of strategy. They wanted to ‘be like Amazon’ and hired Jenna Owens, Mike Recupero, and Matt Furlong from Amazon in 2021.” Pachter added that Cohen “is incapable of running a retail operation…. It’s sort of like Elon Musk running Twitter.”
GameStop posted its fourth consecutive fall in quarterly revenue, missing market estimates as consumers cut back on non-essential spending in an uncertain economy. The company reported revenue of $1.24 billion for the quarter ended April 29, compared to analysts’ average estimate of $1.36 billion, according to Refinitiv. It also posted a loss of 14 cents per share, compared to analysts’ estimates of a loss of 12 cents per share for the quarter.
FAQs:
What caused GameStop’s shares to fall by 20% in extended trading?
– The firing of CEO Matt Furlong and the appointment of billionaire Ryan Cohen as executive chairman caused GameStop’s shares to fall by 20% in extended trading.
Why did GameStop fire CEO Matt Furlong?
– The company did not give a reason for Furlong’s termination.
Who is Ryan Cohen?
– Ryan Cohen is a billionaire and co-founder of the online pet products retailer Chewy. He has been serving as chairman of GameStop since 2021 and is a majority shareholder of the company.
What has Ryan Cohen been responsible for at GameStop?
– Ryan Cohen has been driving GameStop’s transition into e-commerce and has been responsible for the shakeup in its top management, including hiring some former Amazon employees.
Who are Jenna Owens and Michael Recupero?
– Jenna Owens was the former COO of GameStop who left the company in October 2021 after only seven months. Michael Recupero was the former CFO who was terminated last year. Both were former Amazon employees who were hired by GameStop in 2021.
Why did GameStop miss market estimates?
– GameStop missed market estimates due to a fourth consecutive fall in quarterly revenue, caused by consumers cutting back on non-essential spending in an uncertain economy.
Ryan Cohen named as executive chairman as GameStop CEO fired
GameStop, the US videogame retailer that became the center of a ‘meme-stock’ trading frenzy earlier this year, has fired its CEO Matt Furlong just two years after hiring him, and appointed billionaire Ryan Cohen as executive chairman. The announcement sent shares down 20% in extended trading. Furlong, a former executive at Amazon, joined the company in 2021, but it is not clear why he was terminated. Cohen, who co-founded online pet products retailer Chewy, has been serving as chairman of GameStop since 2021 and is also a majority shareholder of the Texas-based company. Cohen is responsible for the shakeup in GameStop’s top management and its transition into e-commerce, which has included the hiring of some former Amazon employees. However, Michael Pachter, an analyst at Wedbush Securities, criticized the move and said it “reflects the utter lack of strategy. [GameStop] wanted to ‘be like Amazon’ and hired Jenna Owens, Mike Recupero and Matt Furlong from Amazon in 2021. Cohen is incapable of running a retail operation….It’s sort of like Elon Musk running Twitter.” The videogame retailer posted its fourth consecutive fall in quarterly revenue and missed market estimates, as consumers dialed back non-essential spending in an uncertain economy. The company’s revenue for the quarter ended April 29 was $1.24 billion, compared with analysts’ average estimate of $1.36 billion, according to Refinitiv. GameStop also posted a loss of 14 cents per share, compared with analysts’ estimates of a loss of 12 cents per share for the period.