gamestop unexpectedly fires its ceo

The Board of Directors of GameStop has unexpectedly ousted the company’s Chief Executive Officer, Matthew Furlong, without plausible cause according to information disclosed by the videogame retailer yesterday.

In a dramatically brief statement released alongside the firm’s financial results covering the first quarter of 2023, the company’s top governance body also decided to appoint Ryan Cohen as Executive Chairman of GameStop while it looks for a replacement for Furlong.

In March 2022, Ryan Cohen boosted its GameStop stake to almost 12% of the company. Back then, his position was worth around $850 million. More than a year after, the tech billionaire has lost at least a quarter of his investment.

Furlong’s Tenure Was Short Lived and Unfruitful

Furlong joined GameStop in June 2021 when the company was looking for someone to lead the business into a new stage of development. His appointment took effect a few months after the first large spike in the value of the company’s stock as a result of the so-called ‘meme stock craze’.

GameStop managed to take advantage of this odd event to raise capital via the sale of its common shares and this allowed it to reduce its long-term debt dramatically to give the business a much-needed financial breather.

In the press release that announced Furlong’s appointment, he was described as a “veteran e-commerce leader” who serves as the head of Amazon’s Australian business. He also oversaw the brand, marketing, and sales strategy for Procter & Gamble at some point in his career.

A new Chief Financial Officer – Mike Recupero – was appointed alongside Furlong. However, the executive was ousted roughly a year after in July 2022 as part of an internal reorganization process that also involved the involuntary departure of several employees.

Furlong’s responsibility was to propose and execute a new strategy for the company that would involve the use of blockchain technology, non-fungible tokens (NFTs), and cryptocurrencies to establish it as a pioneer in the emergent web3 industry.

None of those prospects have come to fruition and sales of videogames have kept plummeting. In 2022, net sales went down by 1.4% to $5.93 billion with the United States still accounting for the majority of the firm’s top-line figure and the hardware and accessories category still being the most important category for the business.

GameStop Might Be Preparing to Shut Down its Web3 Projects

gamestop nft marketplace

GameStop (GME) has been reportedly engaging in “intense” cost-cutting initiatives according to the firm’s 10-Q filing (quarterly earnings report) for Q1 2023. The firm is said to be weighing ideas including store closings and exiting unprofitable businesses to reduce its overhead.

Interestingly, in this same report, the pursuit of web3-focused strategies and initiatives is no longer listed as one of the company’s “business priorities”. This may indicate that GameStop is ready to pull the breaks on these projects. That said, no official announcement has been made in regards to this.

The stock of GME is dropping by nearly 22% in pre-market stock trading action this morning to $20.6 per share following the release of this financial report.

Analysts from Wedbush Securities emphasized that Ryan Cohen’s strategy for GameStop was to make the company an Amazon-like web3-powered marketplace for video games and digital assets.

Now, with the departure of Furlong – a former Amazon (AMZN) executive – it is unclear what the company’s strategic focus will be.

In a video that went viral on TikTok in February this year, a store manager for GameStop claimed that his store is empty and that everything is on clearance. The video harnessed over 6 million views in a relatively short period and the comment section was filled by other GameStop employees and customers who rambled about the firm’s high prices and lack of competitiveness.