GameStop fires CEO, names Ryan Cohen executive chairman; shares plummet

GameStop
fired
its

CEO
Matthew
Furlong
and
appointed
its
board
chairman
Ryan
Cohen
as
executive
chairman
effective
immediately,
the

company
said
Wednesday. 

Shares
of
GameStop
dropped
more
than
20%
in
extended
trading
after
the
video
game
retailer
announced
the
termination.
It
released
the
news
on
the
same
day
it
reported
its
revenue
dropped
and
its
loss
narrowed
in
its
fiscal
first
quarter
compared
to
the
year-ago
period.

The
company
didn’t
provide
a
reason
for
the
firing
but
noted
the
change
in
its
quarterly
securities
filing.

“We
believe
the
combination
of
these
efforts
to
stabilize
and
optimize
our
core
business
and
achieve
sustained
profitability
while
also
focusing
on
capital
allocation
under
Mr.
Cohen’s
leadership
will
further
unlock
long-term
value
creation
for
our
stockholders,”
the
filing
states.

Cohen
took
a
stake
in
GameStop
in
2020,
and
in
January
2021
he
and
two
other
former
Chewy
executives
were
named
to
the
retailer’s
board
as
part
of
an
agreement
with
the
company’s
management.
His
investment
firm,
RC
Ventures,
currently
has
an
11.9%
stake
in
GameStop,
according
to
filings.

In
a
separate
securities
filing,
GameStop
disclosed
Furlong
was
fired
on
Monday
and
said
he
will
be
permitted
to
receive
payments
and
benefits
“associated
with
a
termination
without
cause.”
Furlong
also
resigned
from
the
company’s
board
on
the
same
day,
which
reduced
it
to
just
five
members.

The
filing
noted
Cohen
will
be
in
charge
of
capital
allocation,
evaluating
potential
investments
and
acquisitions
and
overseeing
the
managers
of
GameStop’s
holdings.

In
a

cryptic
tweet
posted
about
a
half
an
hour
after
Furlong’s
firing
was
announced,
Cohen
wrote:
“Not
for
long.”

The
activist
investor
and


Chewy
founder
is
known
for
saying
very
little
publicly
and
making
vague
statements
online.

The
decision
to
part
ways
with
Furlong
comes
just
months
after
GameStop
reported
its

first
quarterly
profit
in
two
years
while
he
was
at
the
helm.

As
part
of
the
leadership
shuffle,
Alan
Attal,
a
former
Chewy
executive
and
a
current
member
of
GameStop’s
board,
was
named
lead
independent
director
of
the
board,
the
filing
said.

Mark
Robinson,
GameStop’s
general
counsel,
was
named
the
retailer’s
general
manager
and
principal
executive
officer.
His
duties
will
include
“administrative
matters,
corporate
development,
legal
affairs
and
support
for
GameStop’s
holdings,
including
the
oversight
of
other
executive
officers
besides
[Cohen],”
according
to
the
filing.

Robinson
will
report
directly
to
Cohen
and
will
continue
to
serve
as
general
counsel
and
secretary
of
GameStop.

Furlong
was
appointed
as
GameStop’s
CEO
in
June
2021
when
the
company
was
in
the
early
stages
of
a
turnaround
plan.
The
former
Amazon
executive
was
appointed
as
GameStop
was
transitioning
from
a
longtime
brick-and-mortar
retailer
to
an
online
player
with
the
ability
to
compete
with
rivals
like

Walmart, Sony and Microsoft. 

Prior
to
his
tenure
as
GameStop’s
CEO,
which
lasted
about
two
years,
Furlong
spent
nearly
nine
years
at
Amazon,
most
recently
leading
the
growth
of
its
Australia
business.
Prior
to
that,
he
served
as
a
technical
advisor
to
the
head
of
Amazon’s
North
America
consumer
business
and
worked
for Procter
&
Gamble.

Furlong
could
not
immediately
be
reached
for
comment.

The
announcement
coincided
with
GameStop’s
fiscal
first
quarter
earnings
release.
In
the
three
months
that
ended
April
29,
GameStop
reported
revenue
of
$1.24
billion,
down
from
$1.38
billion
in
the
year-ago
period.
Its
net
loss
narrowed
to
$50.5
million,
or
17
cents
per
share,
from
$157.9
million,
or
52
cents
a
share,
a
year
earlier.

Sales
in
United
States,
Canada
and
Australia
dropped
by
16.4%,
18.5%
and
8.9%,
respectively,
compared
to
the
year-earlier
period,
while
sales
in
Europe
increased
26.2%
year
over
year,
according
to
GameStop’s
quarterly
filing.

The
company
attributed
the
drop
in
sales
to
currency
fluctuations,
fewer
significant
gaming
title
launches
and
soft
sales
in
pre-owned
software
and
hardware
and
collectibles.
In
the
collectibles
category,
where
GameStop
has
the
ability
to
drive
long-term
growth,
sales
dropped
to
$173
million,
compared
to
$220.9
million
in
the
year-ago
period.

The
company
incurred
$14.5
million
in
transition
costs
related
to
its
restructuring
efforts
in
Europe.
It
noted
it
will
take
more
transition
charges
in
the
current
quarter.

GameStop
has
improved
its
margins
by
dramatically
slashing
costs.
Selling,
general
and
administrative
expenses
came
in
at
$345.7
million
for
the
quarter,
down
from
$452.2
million
in
the
year-ago
period.

In
a
news
release,
the
company
said
it
would
not
hold
a
conference
call
to
discuss
the
quarter’s
earnings.

Read
the
full
earnings
release

here.