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GameStop fires CEO

by on08 June 2023

…soon after it announced part of its first quarter earnings

GameStop has fired CEO Matt Furlong, the company announced as part of its first quarter 2023 earnings.

Board chairman Ryan Cohen has been appointed executive chairman and seems to be taking over. Cohen, who founded the e-commerce site Chewy, has invested in several "memestocks" including GameStop and Bed, Bath and Beyond. His surprise sale of Bed, Bath, and Beyond stock in 2022 raised eyebrows and led to at least one lawsuit accusing him of pumping and dumping the stock.

His initial investment in GameStop in early 2021 led to an enormous rise in the stock and contributed to its status as a memestock beloved by the Reddit sub r/wallstreetbets.

No one is saying why Matthew Furlong was fired. He started at GameStop in June 2021- after the beginning of the chaos with GameStop's stock price. He oversaw things like the company's move into NFTs, and carried out some layoffs in November and fired the company's CFO.

However, his firing so close to the quarterly results suggests that he has been unable to do much to save the company’s dodgy financial position. This is odd as the figures are not that bad.
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 the United States, Canada, and Australia dropped by 16.4 per cent, 18.5 per cent and 8.9 per cent, respectively, compared to the year-earlier period. In contrast, sales in Europe increased 26.2 per cent 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, hardware, and collectables. In the collectables category, where GameStop can 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 European restructuring efforts. 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.

GameStop also made Mark Robinson the company's new "principal executive officer" with the title of general manager. Robinson has been at GameStop for nearly eight years, according to his LinkedIn, and he most recently served as the company's general counsel. GameStop cancelled its earnings call today.

Shortly after the news broke, Ryan Cohen cryptically tweeted: "Not for long".

He better move fast, yesterday the share price of GameStop fell more than 25 percent.


Last modified on 08 June 2023
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