GameStop ousts CEO and chairman Ryan Cohen takes reins as sales extend slide

Bengaluru – Mr Ryan Cohen, the billionaire investor whose bet on GameStop made him popular with meme stock traders, took over as executive chairman on Wednesday after the video game retailer ousted its chief executive and reported a wider-than expected quarterly loss.

Investors pushed the stock price down more than 20 per cent in after-hours trading, continuing a roller-coaster ride that started in early 2021 when retail investors piled in to prove hedge fund betting on GameStop’s demise wrong.

Some analysts are questioning whether the hard-charging Mr Cohen, who is the company’s largest investor, can actually turn GameStop around.

Chief executive Matt Furlong’s firing on Wednesday came almost exactly two years after GameStop brought the former Amazon.com executive back to the United States from Australia, where he was working.

Mr Cohen, who made his fortune selling online pet products retailer Chewy for US$3.5 billion (S$4.7 billion) in 2017, joined GameStop’s board in early 2021 and has been putting his imprint on strategy ever since.

He was elected chairman in June 2021.

With plans to remake the company into an e-commerce powerhouse, Mr Cohen overhauled its top ranks by bringing in a string of executives from Amazon.

But many of the hires, who were often drawn from Mr Cohen’s personal network and vetted by him, have not lasted long.

Mr Cohen has also backtracked on plans to build out e-commerce, relying more on GameStop’s bricks-and-mortar stores and using them as places where customers can pick up online orders.

GameStop on Wednesday said net sales for the three months through April fell 10 per cent to US$1.24 billion, marking a fourth consecutive decline in quarterly revenue.

Since Mr Furlong’s appointment was announced, GameStop shares have lost more than half of their value and are down about 65 per cent since June 2021.

Ever since making his first investment in GameStop, Mr Cohen has been fashioned into an activist investor, a reputation he expanded with bets in 2022 on Bed Bath & Beyond and more recently on Alibaba and Nordstrom.

At each company he pushed for changes with mixed success.

Bed Bath & Beyond, where he quickly settled with the company for board seats in 2022, filed for bankruptcy earlier in 2023.

At Nordstrom, news of Mr Cohen’s stake sent the share price higher, but he then quietly withdrew his nomination for two director candidates after pushing the company to replace the Nordstrom director who had previously been Bed Bath & Beyond’s CEO.

Nordstrom’s stock price is down 29 per cent in the last 52 weeks.

While Mr Cohen arrived at GameStop after building Chewy into a powerhouse, industry analysts and some investors are now questioning his ability to revive other retail companies.

Wedbush Securities managing director Michael Pachter said Mr Cohen “is incapable of running a retail operation... It’s sort of like Elon Musk running Twitter.”

At Bed Bath, Mr Cohen sold his stake in August, just months after reaching the settlement in March, sending its stock price tumbling. REUTERS