GameStop has terminated CEO Matt Furlong and announced that meme stock investor and SuperStonk cult-hero, Ryan Cohen, will take over as Executive Chairman. The famous brick-and-mortar gaming retailer’s stock price proceeded to drop over 15 per cent in after-hours trading.
The news comes as the company reported a disappointing first quarter for its 2023 fiscal year. Despite being profitable for the first time in years back in February, GameStop is back in the red with a net loss of $US50.5 million for the period and has cancelled its planned call with analysts to discuss the results. That’s just a third of what the losses were this time last year, but it still pours cold water on hopes that the company would quickly and radically transform itself into something other than a business that sells physical games in a marketplace where players are increasingly pivoting to digital downloads.
Furlong was the fifth CEO in as many years, and hailed from Amazon. His arrival signalled to some that GameStop would try to move the company toward more of an online delivery model, but that never really panned out. Two senior sources who served under the now-former CEO told Kotaku that while he was the ostensible boss, marching orders often seemed to come directly from Cohen, sometimes causing confusion and conflicts within the company.
The Chewy founder who sold his home delivery pet food business for billions is a hero among meme stock investors on subreddits like WallStreetBets and SuperStonk. The most die-hard fans treat him more like a prophet than a rich guy who sold his one good idea, hanging onto his every social media post and business move hoping to discover clues to the master plan that will make their GameStop stock even more ridiculously overpriced.
At the same time, GameStop workers in the stores themselves continue to suffer. Cost cutting measures and ramped-up sales goals have increased pressure on store managers and hourly employees, leading to high turnover and entire teams at some locations randomly deciding to quit on the spot. Meanwhile, players themselves, never exactly huge fans of GameStop’s aggressive sales tactics and terrible trade-in deals, have had to put up with botched pre-orders and disappearing collector’s editions.