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Ryan Cohen Becomes Executive Chairman of GameStop, CEO Ousted
Ryan Cohen, the billionaire investor who made a bold bet on GameStop and became a hero to meme stock traders, has taken over as executive chairman after the video game retailer ousted its CEO. The company’s shares fell by more than 20% in after-hours trading, raising questions about Cohen’s ability to turn the company around. In a regulatory filing, GameStop said that the new executive function added to Cohen’s previous role gives him control over capital allocation, acquisitions, and oversight of the company’s holdings, among others. CEO Matt Furlong’s firing came two years after GameStop brought him in from Australia, but the company has not explained why he was terminated or if he will be replaced.
Board Changes at GameStop
The company agreed to make Cohen executive chairman and reduced the size of its board. Mark Robinson, the company’s top lawyer, was named general manager with duties including oversight of other executive officers besides the executive chairman. He will report to Cohen. Since his appointment in early 2021, Cohen, who made his fortune selling online pet products retailer Chewy, has been overhauling GameStop’s top ranks, bringing in a string of executives from Amazon. However, many of the hires, who were often drawn from Cohen’s personal network and vetted by him, have not lasted long.
GameStop’s Changing Strategy
Cohen, who aims to remake the company into an e-commerce powerhouse, initially planned to build out the company’s e-commerce capabilities, but has since relied more on brick-and-mortar stores to serve as places where customers can pick up online orders. The quarterly earnings report showed that GameStop’s net sales fell by 10% to $1.24bn in the three months through April, marking a fourth consecutive quarterly revenue decline. GameStop did not schedule a conference call to discuss the quarter.
Cohen’s Activist Investor Reputation
Cohen has become an activist investor with his bets on GameStop, Bed Bath & Beyond, Alibaba, and Nordstrom. At Bed Bath & Beyond, where he quickly settled for board seats last year, the company filed for bankruptcy earlier this year. At Nordstrom, after Cohen pushed the company to replace the Nordstrom director who had previously been Bed Bath & Beyond’s CEO, he politely withdrew his nomination for two director candidates, and the company’s stock price fell by 29% in the last 52 weeks. While investors love Cohen, some question his ability to revive other retail companies.
Conclusion
Ryan Cohen’s appointment as executive chairman of GameStop marks another step in his efforts to turn the company around, and his ability to do so is under scrutiny. His strategy for GameStop has evolved as the company’s earnings decrease, which has supported doubts about his capability as a retail leader. He has become an activist investor, and while he has seen mixed success, this appointment is a major test for him.
FAQ
Who is Ryan Cohen?
Ryan Cohen is a billionaire investor who made a bold bet on GameStop and became an activist investor. Cohen made his fortune selling Chewy, an online pet products retailer, for $3.5 billion in 2017.
What will be Ryan Cohen’s role at GameStop?
GameStop said that the new executive function added to Cohen’s previous role gives him control over capital allocation, acquisitions, and oversight of the company’s holdings, among others.
Why was GameStop’s CEO, Matt Furlong, ousted?
The company has not explained why Furlong was terminated or if he will be replaced.
Has Ryan Cohen been successful with his bets on other companies?
While Cohen has become an activist investor with bets on GameStop, Bed Bath & Beyond, Alibaba, and Nordstrom, he has seen mixed success. Bed Bath & Beyond filed for bankruptcy, while Nordstrom’s stock price is down 29% in the last 52 weeks.
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