GameStop Taps Amazon Executives to Lead Turnaround Effort
(Bloomberg) -- GameStop Corp. is tapping a pair of Amazon.com Inc. executives to lead its turnaround effort, betting they can carry out an audacious plan to convert a brick-and-mortar chain into an e-commerce powerhouse.
Matt Furlong, who oversaw Amazon’s Australian business, will become chief executive officer of GameStop, while fellow Amazon veteran Mike Recupero will serve as chief financial officer, the video-game seller said Wednesday. Furlong starts on June 21, and Recupero begins work July 12.The company also reported better sales than analysts predicted. They came in at $1.28 billion in the fiscal first quarter, which ended May 1. Analysts projected $1.17 billion. GameStop’s loss was also narrower than expected, and the company announced plans to sell as much as 5 million shares through a so-called at-the-market offering.See more details.
Key Insights
GameStop became the face of meme stocks this year, with social-media buzz helping propel the shares more than 1,500% in 2021. But the company has cautioned that its turnaround is still in the early stages. Activist investor Ryan Cohen, who was confirmed as GameStop’s new chairman at the company’s annual meeting earlier Wednesday, told shareholders there was “a lot of work in front of us.”Cohen, the former head of pet-supply site Chewy, is orchestrating a strategy shift at GameStop, hoping to turn it into an Amazon contender by boosting the number of products and services it sells.GameStop has a huge fleet of physical stores and faces an industry shifting inexorably online, but it’s less burdened than many struggling retailers. It recently redeemed its long-term debt early, earning upgrades from credit agencies like Moody’s, and raised money for the turnaround effort through a stock sale.
Market Reaction
With the company planning to sell more shares -- and diluting the holdings of existing investors -- GameStop slid in late trading. The stock had reached all-time high of $483 in January, before slumping and then rallying again. It was up less than 1% to $302.56 Wednesday at the close.
Get More
Read GameStop’s statement.See Wall Street estimates.
(Updates with share sale plan in second bullet point.)
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