GameStop names billionaire Ryan Cohen as CEO in turnaround push
Reuters
Published Sep 28, 2023 06:20AM ET
Updated Sep 28, 2023 03:40PM ET
By Aditya Soni
(Reuters) -GameStop on Thursday named billionaire Ryan Cohen as its CEO and chairman, tightening the activist investor's grip on the ailing videogame retailer that he intends to turn around.
The brick-and-mortar retailer that once attracted gamers has struggled in the age of online downloads, drawing it to the heart of a clash in 2021 between hedge funds betting on its demise and retail traders pumping up its price.
At the peak of that meme stock rally, Cohen, GameStop (NYSE:GME)'s largest investor, joined the board to aid a pivot to e-commerce.
His shot to fame was building up an online pet products retailer Chewy (NYSE:CHWY) into a powerhouse that he sold for $3.5 billion in 2017.
Cohen became executive chairman at Gamestop in June after former CEO Matt Furlong was ousted. The company said he will relinquish that title and will not receive any compensation for his new roles.
The billionaire had initially tried to steer GameStop aggressively toward a more online-focused model as the chain, dependent on physical stores, looked to revive its business.
But he has backtracked on some of those e-commerce plans, relying more on GameStop's brick-and-mortar stores and using them as places where customers can pick up online orders.
The company's quarterly earnings earlier this month signaled that the strategy was working as strong demand for videogames, collectibles and consoles helped GameStop post a smaller-than-expected loss and revenue that beat estimates.
Still, there are concerns among analysts about the slow pace of change at GameStop and Cohen's mixed record as an activist investor at the companies he has targeted, including bankrupt retailer Bed Bath & Beyond (OTC:BBBYQ) and Nordstrom (NYSE:JWN).
The company has seen several executive departures in recent years, with former chief operating officer Jenna Owens leaving in October 2021 just seven months after joining.
Former finance chief Michael Recupero, who was hired at the same time as Furlong, was terminated last year.
"The appointment of the controlling shareholder reflects the difficulty GameStop has had in attracting executives," said Wedbush analyst Michael Pachter.
Get The News You Want
"We remain convinced that GameStop is doomed as declining physical software sales and a shift of sales to subscriptions and digital downloads seal its fate."
The video-game retailer's shares have lost more than 80% of their value since the record high in 2021, including a more than 7% decline this year. They were trading 2% lower on Thursday.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.