GameStop relieved CEO Matthew Furlong of his duties, appoints Ryan Cohen as executive chairman - effective immediately
GameStop, the popular video game retailer, made headlines on Wednesday with the unexpected announcement of CEO Matthew Furlong's termination. GameStop's shares plunged over 20% in after-hours trading following the news. In addition to the leadership shake-up, GameStop also reported a drop in revenue and a narrower loss for its fiscal first quarter compared to the previous year.
GameStop relieved CEO Matthew Furlong of his duties, effective immediately, as announced in a securities filing. GameStop did not provide a specific reason for the termination but hinted at the change being part of efforts to stabilize and optimize its core business for long-term value creation. Board chairman Ryan Cohen, who had already taken a stake in GameStop last year, was appointed as the new executive chairman. Cohen's investment firm, RC Ventures, currently holds an 11.9% stake in GameStop.
The news of Furlong's firing took a toll on GameStop's stock, leading to a significant drop in share prices during extended trading. GameStop's fiscal first-quarter earnings showed a decrease in revenue to $1.24 billion, down from $1.38 billion in the same period the previous year. However, the net loss narrowed to $50.5 million, or 17 cents per share, compared to $157.9 million, or 52 cents per share, in the year-ago period. The decline in sales was attributed to currency fluctuations, fewer significant game releases, and weaker performance in pre-owned software and collectibles.
With Ryan Cohen assuming the role of executive chairman, he will be responsible for capital allocation, evaluating potential investments and acquisitions, and overseeing GameStop's holdings. Alan Attal, a former Chewy executive and current board member, was named lead independent director. Additionally, Mark Robinson, GameStop's general counsel, was appointed as the retailer's general manager and principal executive officer, reporting directly to Cohen.
Ryan Cohen, known for his low-profile and cryptic remarks, added a layer of mystery to the CEO departure. Shortly after the announcement, he posted a tweet saying, "Not for long," hinting at potential changes or developments under his leadership. This enigmatic statement has left analysts and investors speculating about his strategic plans for GameStop.
GameStop's decision to part ways with Matthew Furlong comes just months after the company reported its first quarterly profit in two years under his leadership. As GameStop continues its transformation from a brick-and-mortar retailer to an online player, Cohen's expertise and experience with Chewy could play a vital role in the company's future direction.
Join LevelFields now to be the first to know about events that affect stock prices and uncover unique investment opportunities. Choose from events, view price reactions, and set event alerts with our AI-powered platform. Don't miss out on daily opportunities from 6,300 companies monitored 24/7. Act on facts, not opinions, and let LevelFields help you become a better trader.