Shares in one-time meme stock darling GameStop plunge 20% after firing its CEO and reporting lackluster sales
GameStop, the struggling video-game retailer, fired Matt Furlong, its chief executive officer for the past two years, and said Chairman Ryan Cohen will take on a new executive role. The shares plunged more than 20%.
Cohen’s responsibilities as executive chairman of the video-game chain will include management oversight and capital allocation, the company said Wednesday in a statement. GameStop’s general counsel, Mark Robinson, will become general manager and principal executive officer.
The money-losing retailer also reported fiscal first-quarter sales that fell short of analysts’ estimates. Revenue in the period ended April 29 fell to $1.24 billion, missing estimates of $1.34 billion. The loss in the quarter narrowed to 14 cents and was smaller than the 17 cents analysts projected.
GameStop has struggled to adapt to the increasing share of game sales conducted online and away from stores. Annual sales have plunged from a recent peak of $9.36 billion to $5.93 billion last year.
Furlong delivered a profitable holiday quarter for the company, in part due to job cuts and store closings. Cohen said at the time that GameStop would become a much healthier business. The company said in a filing Wednesday that while Furlong was fired as CEO, his resignation from the board “did not result from any disagreement with the company.”
Cohen is the chain’s largest shareholder with 12% of the stock. Shortly after GameStop announced Furlong’s departure, Cohen posted a message on Twitter that appears to be a play on his name.
Cohen is the founder of Chewy.com. Despite a historic run-up in GameStop shares in 2021 during the meme-stock craze, he has failed to capitalize on interest in the brand. Management has unsuccessfully experimented with Web3 and a variety of business models for its brick-and-mortar stores.
In its filing, the company said it continues to focus on “three overarching goals: establishing omnichannel retail experience, achieving profitability and leveraging brand equity to support growth.”
Shares of GameStop fell as low as $19.89 in extended trading after the announcements. The shares were up 41% this year through the close Wednesday in New York.