Video game retailer GameStop, which garnered significant attention during the meme stock frenzy, is changing its chief executives amid a web3 push.
The company’s stock price is currently down 18% in pre-market trading due to investor apprehensions and disappointing Q1 results.
GameStop Selects Cohen as New CEO for Web3 Push
GameStop fired CEO Matthew Furlong on June 7 and promptly named board chairman Ryan Cohen as the company’s executive chairman. This decision sent the company’s shares tumbling soon after.
Furlong’s firing was referenced in GameStop’s quarterly securities filing. However, the company did not give any reason for the decision.
Furlong only had a 24-month employment deal, according to publicly available employment details.
The business revealed in July 2022 that Michael Recupero was removed as its CFO and was replaced by Diana Saadeh-Jajeh.
In 2020, Ryan Cohen, a well-known investor and the creator of the online retailer Chewy, acquired a stake in GameStop. In 2021, he later joined the GameStop executive board.
According to data cited by CNBC, Cohen’s investment company, RC Ventures, now owns an 11.9% stake in GameStop.
Refusing to Quit Despite Slow Tech Market
With Cohen’s promotion to CEO, he will now have control over GameStop’s web3 push and management, capital allocation, and investment decisions. Under Cohen’s direction, the company has expressed confidence that it can optimize and stabilize its core business, sustain profitability, and create long-term value for shareholders.
Furlong was fired shortly after GameStop filed its first quarterly report in two years. The Q1 earnings of the corporation, however, disappointed Wall Street. GameStop’s revenue decreased to $1.24 billion from $1.38 billion in the corresponding quarter last year, but its net loss shrank to $50.5 million from $157.9 million. Due to fewer key gaming title launches and other factors, sales significantly decreased in all major markets. However, margin improvement was aided by the company’s efforts to reduce expenses through layoffs.
While GameStop’s stock price has dropped due to a change in leadership and underwhelming Q1 results, the firm is moving forward in the cryptocurrency and blockchain sectors. To develop its GameFi ecosystem, it recently established a strategic partnership with Telos Foundation.
In collaboration with ImmutableX, GameStop debuted its brand-new NFT gaming marketplace in October 2022. Before that, its digital wallet was available to allow players to buy cryptocurrency and non-fungible tokens (NFTs) in-game. Considering the potential in crypto gaming, the company’s future launches could be interesting to watch.
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