FXEmpire.com -
Highlights
- GameStop’s board has fired CEO Matt Furlong
- The stock plummeted over 20% in response.
- GameStop named board chairman Ryan Cohen as executive chairman. But there are signs there could be more trouble in paradise.
GameStop’s board of directors has fired CEO Matthew Furlong and named board chairman Ryan Cohen as executive chairman. Investors ran for the exits, sending the stock spiraling over 20% lower in early trading on Thursday. The stock has not experienced losses of this magnitude in two years.
GameStop’s executive shakeup was announced in the company’s Q1 earnings report. The company’s revenue came in at $1.24 billion while Wall Street was expecting $1.34 billion. The company also canceled itsearnings callwith analysts.
GameStop’s board held the details of the firing close to the vest. But a filing reveals that they believe Cohen, who has been with the company since 2020, holds the keys to unlocking long-term value in the stock. GME shares have risen approximately 12% year-to-date. But the stock has been halved since year-ago levels.
However, there are signs that Cohen has reservations about being named executive chairman, tweeting on the day of the shakeup, “Not for long.”
Not for long
— Ryan Cohen (@ryancohen) June 7, 2023
With the changes, Furlong, who is an Amazon alum, has resigned from the board, leaving the company with just six members. He will continue to be paid based on a “termination without cause,” a regulatory filing reveals. Furlong was hired with great hopes to transform GameStop from a brick-and-mortar company into a digital platform.
GameStop Stock Is Far From Boring
GameStop stock was at the center of the WallStreetBets movement that unfolded in 2021. Individual investors banded together on platforms like Reddit and online trading platform Robinhood to send the stock price soaring in an effort to leave hedge funds with short positions holding the bag. The short squeeze chaos resulting in a halt in trading of GME shares and triggered a class-action lawsuit.
This article was originally posted on FX Empire
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