- GameStop fired CEO Matthew Furlong and appointed Ryan Cohen as executive chairman.
- The company did not give a reason for the termination.
- Shares of the video game company fell more than 20% in extended trading following the news.
Ryan Cohen from an appearance on CNBC.
CNBC
GameStop fired its CEO Matthew Furlong and appointed its board chairman Ryan Cohen as executive chairman, effective immediately, the company announced on Wednesday.
GameStop’s shares fell more than 20% in extended trading after the video game retailer announced the cancellation. The company broke the news on the same day it reported a decline in revenue and a reduction in loss in the fiscal first quarter compared to the same period last year.
The company did not give a reason for the layoff, but did cite the change in its quarterly securities statements.
“We believe the combination of these efforts to stabilize and optimize our core business and deliver sustainable profitability while focusing on capital allocation under Mr. Cohen’s leadership will enable continued long-term value creation for our shareholders,” the filing reads.
According to the filings, Cohen’s investment firm RC Ventures currently owns an 11.9% stake in GameStop.
In another securities statement, GameStop announced that Furlong was fired Monday and said he was allowed payments and benefits “related to termination without reason.” On the same day, Furlong also resigned from the company’s board of directors, reducing it to just five members.
The filing states that Cohen will be responsible for allocating capital, evaluating potential investments and acquisitions, and overseeing managers of GameStop’s holdings.
in one cryptic tweet Cohen wrote about half an hour after Furlong’s firing was announced, “Not for long.”
The activist investor and Chewy founder is known for speaking very little publicly and for making vague statements online.
The decision to divest Furlong comes just months after GameStop, which he led, reported its first quarterly profit in two years.
A GameStop store will open on March 16, 2023 in a mall in Chicago, Illinois.
Scott Olson | Getty Images
As part of the leadership change, Alain Attal, a former Chewy executive and current GameStop board member, was appointed as the board’s senior independent director, the filing said.
GameStop General Counsel Mark Robinson has been appointed as the retailer’s general manager and chief executive officer. His responsibilities include “administrative affairs, corporate development, legal affairs and the support of GameStop’s holdings, including oversight of other officers.” [Cohen]it says in the file.
Robinson will report directly to Cohen and will continue to serve as GameStop’s general counsel and secretary.
The announcement coincided with the release of GameStop’s fiscal first quarter results. For the three months ended April 29, GameStop reported revenue of $1.24 billion, compared to $1.38 billion in the same period last year. It reported a net loss of $50.5 million, or a loss of 17 cents a share, compared to a loss of $157.9 million, or 52 cents a share, a year earlier.
The company incurred $14.5 million in transition costs related to its restructuring efforts in Europe. It has been noted that further transition fees will be incurred in the current quarter.
GameStop has improved its margins by cutting costs drastically. Selling, general and administrative expenses were $345.7 million for the quarter, down from $452.2 million in the same period last year.
In a press release, the company said it would not hold a conference call to discuss quarterly results.
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