GameStop, the video game retailer that became a meme stock phenomenon, has announced that it has fired its CEO Matt Furlong, effective June 5th, 2023. The company did not give a reason for Furlong’s termination, nor did it name a successor. Furlong’s departure comes amid a series of executive changes at GameStop, as the company tries to transform itself into an e-commerce powerhouse under the leadership of board chairman and activist investor Ryan Cohen.
Furlong joined GameStop in June 2021 from Amazon, where he was the country leader for Australia. He was one of several Amazon veterans that Cohen recruited to join GameStop’s top ranks, along with former CFO Michael Recupero, former COO Jenna Owens, former CTO Matt Francis, and former chief growth officer Elliott Wilke. However, none of these hires lasted long at GameStop, as they either resigned or were fired within months of joining.
Cohen, who made his fortune by selling online pet retailer Chewy for $3.5 billion in 2017, became GameStop’s largest shareholder in early 2021 and joined its board shortly after. He was elected chairman in June 2021 and appointed executive chairman on June 7th, 2023. As executive chairman, Cohen has control over capital allocation, evaluating potential investments and acquisitions, and overseeing the managers of the company’s holdings, according to a regulatory filing.
Cohen’s vision for GameStop is to turn it into a digital-first company that can compete with online giants like Amazon and Walmart. He has been pushing for a more customer-centric approach, a focus on gaming culture and community, and an expansion into new categories like NFTs and PC gaming. He has also been cutting costs and streamlining operations, closing hundreds of stores and laying off staff.
However, Cohen’s strategy has not yet translated into improved financial performance for GameStop. The company reported its first quarter 2023 earnings on Wednesday, posting a net loss of $66.8 million on revenue of $1.28 billion. The revenue was up 25% year-over-year, but still below analysts’ expectations of $1.39 billion. The loss was also worse than expected, as analysts had forecast a loss of $52 million.
GameStop’s stock price also took a hit after the earnings announcement and the news of Furlong’s firing. The shares dropped more than 20% in after-hours trading on Wednesday, erasing some of the gains made earlier this year when GameStop became the target of a massive short squeeze orchestrated by retail investors on Reddit’s r/wallstreetbets forum. The stock reached an all-time high of $483 in January 2021, but has since fallen to around $200 as of June 7th.
GameStop did not hold an earnings call on Wednesday, nor did it provide any guidance for the future. The company said it was still evaluating its long-term strategic plan and would share more details when appropriate. It also said it was continuing to search for new talent to join its leadership team.
It remains to be seen whether Cohen can turn GameStop around and deliver on his promises to shareholders and customers. The company faces many challenges in the highly competitive and rapidly changing gaming industry, as well as regulatory scrutiny over its stock market volatility and potential insider trading. Cohen will have to prove that he has more than just memes and tweets to back up his vision.
