GameStop Announces new CEO and CFO
Last Wednesday GameStop held their earnings release, with an announcement that they are replacing their chief executive and chief financial officer.
Everyone in and around the stock market is now familiar with GameStop, and this isn’t for it’s hundreds of stores that are now shutting down for good, but for the hype from Reddit users and it being a “meme” stock within the past year. Despite the traction it earned itself during this time it’s still losing money, customers and closing hundreds of physical stores, due to customers preferring to download games from the internet rather than going into stores and purchasing them. But there has been a major shift in the executive departments, and this could prove a godsend for GameStop as a whole.
Last Wednesday GameStop held their earnings release, with an announcement that they are replacing their chief executive and chief financial officer. Both are joining the company from Amazon, and their experience from the e-commerce giant will help them to turn around the fate of GameStop. Matt Furlong is replacing George Sherman as Chief Executive Officer, and Mike Recupero will become Chief Financial Officer following the resignation of Jim Bell in February. The switch up will likely accelerate the transition from a traditional face-to-face business into a successful cybercorporation and contend with the likes of Walmart and Sony.
"The Company is continuing to actively pursue senior talent with gaming, retail and technology experience," GameStop noted in a press release Wednesday.
Ryan Cohen directed the executive change, whom is the founder of Chewy.com -an online pet supply retailer- after he massively invested in GameStop last year, now owning 12% of the company and subsequently joined the board in January. On Wednesday Cohen was announced as the chairman of GameStop’s board. Along with this, they have also introduced a new role to the team, Chief Technology Officer, which will be fulfilled by Matt Francis who has over two decades of experience in consumer technology and is another person moving over from Amazon.
GameStop posted mixed earnings results for the three months ending May 1st. Their quarterly revenue increased 25% year-over-year to nearly $1.28 billion, despite the $1.16 billion that Wall Street analysts had projected. But the company also posted a major net loss of $66.8 million/$1.01 per diluted share. In April the company had sold more than $550 million in stock, and on Wednesday GameStop announced it will soon file with the Securities and Exchange Commission so they will be able to sell up to 5 million more shares, this may not be followed through upon though. On Wednesday, after-hours trading showed their stock had fallen by 12%, though this comes after a month that their stock climbed to more than 110% after gaining attention from investors again.
"We are in the process of reviewing the request and producing the requested documents and intend to cooperate fully with the SEC Staff regarding this matter," the company said in its quarterly filing with the SEC. "This inquiry is not expected to adversely impact us."
The massive stock drop could be a reaction to the company’s shareholder meeting on Wednesday, and the earnings report may have upset the balance as well. At the meeting, Cohen declined to comment about how he proposes to turn the company around, the Wall Street Journal and other attendees stated. During the quarterly earning call that was extremely short, around ten minutes long, the leaving CEO George Sherman looked at the quarter’s financial results and refused questions from analysts. Sherman did mention that the sales for May were up nearly 27% year-over-year, though GameStop declined to provide annual sales and earnings guidance.
The future of GameStop is unclear, and the month of January when the share prices were up by 1915%, has clearly rocked the company. But with the help of its new executives, the company could be completely turned around and come out the other end shining.
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