Ryan Cohen, the billionaire who holds the largest stake in GameStop, is assuming the roles of CEO, president, and chairman of the video game retailer. Despite already being the board chairman and the company’s biggest individual investor, he will not receive any compensation for these positions. This change in leadership comes at a time when GameStop has been facing challenges due to technological shifts in the gaming industry, and the CEO position has seen frequent turnover, with the company striving to adapt and thrive amid market volatility.
The company’s shares surged by almost 8% during premarket trading after the announcement.
The decision was made over three months after GameStop terminated CEO Matthew Furlong. In his place, Ryan Cohen was named Executive Chairman, and Mark Robinson, a long-serving member of the company, was appointed as the “principal executive officer” and general manager. GameStop did not provide an explanation for Furlong’s dismissal, but it occurred shortly after the company had reported its first quarterly profit in two years while Furlong was in charge. Several weeks later, the company also announced the resignation of CFO Diana Saadeh-Jajeh.
Ryan Cohen, through his holding company RC Ventures, is GameStop’s largest investor with a significant 12% stake. He is known for co-founding Chewy, an online pet supply company, and aimed to modernize GameStop, which was founded back in 1984.
Cohen began acquiring substantial shares in GameStop during a period when the company was facing challenges due to advancements in technology. The rise of digital game downloads meant that GameStop’s traditional model of selling physical discs was becoming less relevant.
GameStop’s remarkable story as a meme stock even inspired a movie titled “Dumb Money.” The company’s shares experienced a surge two years ago when a group of small investors collectively boosted its stock by a staggering 1,000% in just two weeks.
Since Cohen’s arrival at the company, there have been limited indications of a significant turnaround in the business, although there have been a few exceptions. Just recently, GameStop released its second-quarter financial results, revealing a reduced loss compared to the previous year and a modest uptick in revenue.
(Source: Gabrielle Fonrouge | Mike Calia | CNBC | Associated Press)
