GameStop appoints Chewy founder Ryan Cohen as chief executive
GameStop has appointed Chewy founder Ryan Cohen as its CEO in a bid to overhaul its ailing business.
The billionaire is the video game retailer's largest individual investor and chairman of its board. His appointment comes just months after GameStop executives ousted their former CEO Matthew Furlong, who joined the retailer's executive ranks to oversee its turnaround two years ago.
GameStop, whose meme stock generated buzz on Wall Street in 2021, has struggled with poor sales and executive turnover as video game streaming and digital game downloads eat at its profits. The mostly brick-and-mortar chain also faces competition from online retailers, such as Amazon.
At least one analyst expressed skepticism the new CEO would be able to cope with the headwinds facing the money-losing company, whose stock has plunged 38% in the past year and whose revenue has tumbled by one-third since 2014.
"Mr. Cohen has no significant experience managing a physical retailer," said Michael Pachter, an analyst at investment firm Wedbush Securities, said Thursday in a research note. Cohen's efforts to juggle multiple roles at GameStop, despite his lack of experience, comes at a time when the company "lack[s]...clear direction."
Pachter added, "With no path to a turnaround and the inevitable migration of physical software sales to digital downloads, we think Mr. Cohen's appointment ensures GameStop's demise."
Cohen will retain his position on GameStop's board, in addition to taking on the new role, the company said in a statement. The billionaire will not receive compensation for serving as the company's president, CEO and chairman, the statement said.
In 2021, GameStop's shares soared more than 1,000% in two weeks after a band of smaller-pocketed investors, egged on by a Reddit community called WallStreetBets, made plans to boost its stock.
GameStop's surge was followed by the rise of other downtrodden stocks at the time, laying bare the power wielded by a new generation of investors, armed with apps on their phones that make trading fun. During the run-up of GameStop's price, some people wrote on social media platforms that participating in the Reddit-fueled rallies was their chance to stick it to hedge funds.
GameStop's meme stock story is so intriguing that a movie was created about it, called "Dumb Money."
Shares of GameStop fell 1% in early afternoon trading.
The Associated Press contributed reporting.