Video game retailer GameStop abruptly canceled the company's quarterly earnings conference call and fired CEO Matthew Furlong on Wednesday. The retail chain raised the status of activist investor Ryan Cohen from chairman to executive chairman, effective immediately. GME stock tumbled on the news.
The firing came just two years after GameStop brought on Furlong, former Amazon.com executive. GameStop did not provide a reason for Furlong's termination and canceled its late Wednesday earnings call following the announcement.
Furlong also resigned from the board of directors on June 5, leaving GameStop with five members on the board.
Cohen In Control
GameStop upgraded board chairman Cohen's title, handing him responsibility for capital allocation and overseeing management, according to the GameStop release.
The founder and former CEO of Chewy, Cohen led the pet products delivery company until 2018. Privately-owned PetSmart acquired Chewy for $3.35 billion in 2017. Cohen first took exposure to GameStop in 2020, contributing to GME's rise to meme-stock status.
Cohen's firm RC Ventures has an 11.9% stake in GameStop. He joined the board as director in early 2021 and rose to chairman in June after a restructuring.
"We believe the combination of these efforts to stabilize and optimize our core business and achieve sustained profitability while also focusing on capital allocation under Mr. Cohen's leadership will further unlock long-term value creation for our stockholders," GameStop wrote in the filing.
GameStop Earnings
GameStop reported Q1 earnings late Wednesday, missing analyst expectations on both the top and bottom lines.
The company reported its loss improved to 17 cents per share from 52 cents per share a year earlier. Net sales fell 10.3% to $1.24 billion. FactSet analysts expected a loss of 15 cents per share on $1.34 billion in sales.
GME Stock
GME stock dove 17.9% Thursday after unraveling 21.5% premarket following the late Wednesday announcement. Shares surged 5.8% leading up to the report. GameStop stock is up about 16% in 2023.
Shares had a year-to-date gain of 41% through Wednesday's close.
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