(Reuters) – GameStop sank nearly 20% on Thursday and was set for its worst session in two years after the surprise exit of a CEO handpicked to lead its online expansion fanned concerns about the videogame retailer’s ailing business.
Chewy founder Ryan Cohen – popular among “meme stock” traders – stepped up to the executive chairman role on Wednesday, but the company did not name a CEO to succeed former Amazon.com executive Matt Furlong.
“It’s hard to have an opinion with no earnings call, little-to-no investor communication, and lack of consistent strategic vision. One consistency remains, changes at the top,” Jefferies analysts said in a note.
“Over the last 5 years, GameStop has had 5 CEOs and 3 CFOs.”
Several analysts stopped covering the company after retail traders on Reddit’s wallstreetbets forum drove a massive surge in the stock during the pandemic, going against hedge funds that had bet on the death of GameStop’s mostly brick-and-mortar business as online stores dominated videogame sales.
When Cohen bought into the company nearly three years ago, one of his main objectives was to pivot Gamestop toward a more online-focused model to take on larger retailers such as Amazon. But signs of progress have been scarce so far.
The company, which sells collectibles, videogames and consoles, had reported a 10% drop in sales for the three months through April – its fourth consecutive decline in quarterly revenue.
(Reporting by Akash Sriram in Bengaluru; Editing by Devika Syamnath)