GameStop names Chewy founder Ryan Cohen as CEO

GameStop has named Chewy founder Ryan Cohen as its CEO in an effort to overhaul its ailing business.

The billionaire is the video game retailer’s largest individual investor and chairman. His appointment comes just months after GameStop executives displaced their former chief executive Matthew Furlong, who joined the retailer’s senior ranks to oversee its turnaround two years ago.

GameStop, if meme stock generated buzz on Wall Street in 2021, has struggled with poor sales and the management’s turnover as streaming video games and downloading digital games eat into its profits. The mostly brick-and-mortar chain also faces competition from online retailers such as Amazon.

At least one analyst expressed skepticism that the new CEO would be able to weather the headwinds facing the money-losing company, whose stock has plunged 38% in the past year and whose revenue has fallen by a third since 2014 .

“Mr. Cohen has no significant experience managing a brick-and-mortar retailer,” Michael Pachter, an analyst at investment firm Wedbush Securities, said Thursday in a research note. Cohen’s efforts to juggle multiple roles at GameStop, despite his lack of experience, come at a time when the company “lacks[s]…clear direction.”

Pachter added, “With no path to a turnaround and the inevitable migration of physical software sales to digital downloads, we believe Mr. Cohen’s appointment ensures GameStop’s demise.”

Cohen will retain his seat on GameStop’s board, in addition to taking on the new role, the company said in a statement. The billionaire will not receive compensation for serving as the company’s president, CEO and chairman, the statement said.

In 2021, GameStop’s stock jumped more than 1,000% in two weeks after a group of smaller-pocketed investors, encouraged by a Reddit community called WallStreetBets, had plans to boost the stock.

GameStop’s rise was followed by the rise of other depressed stocks at the time, exposing the power wielded by a new generation of investors, armed with apps on their phones that make trading fun. During the run-up to GameStop’s price, some people wrote on social media platforms that participating in Reddit-run rallies was their chance to stick it to hedge funds.

GameStop’s meme stock story is so exciting that a movie was made about it, called “Dumb Money.”

Shares of GameStop were down 1% in early afternoon trading.

The Associated Press contributed reporting.

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