Ryan Cohen, founder of Chewy and a significant investor in GameStop, has tightened his grip on the ailing brick-and-mortar videogame retailer he intends to turn around. On Thursday, the company named him its CEO and chairman, firing longtime chief Matthew Furlong and promoting Cohen to the top job. The move comes just a week after GameStop posted a quarterly loss and revenue that was better than expected but fell short of expectations.
The company said in a news release that Cohen, whose investment firm RC Ventures took a stake in GameStop in 2020, will oversee the capital allocation process and lead management. He will not receive a salary or other compensation for his new role. The company said that Cohen, who will remain on the board of directors, will be responsible for implementing the company’s strategy.
Investors cheered the company’s announcement, sending shares up more than 10% in premarket trading. The stock has been on a roller-coaster ride since 2021, when retail investors drove up its price in an attempt to prove that bets by hedge funds on GameStop’s demise were wrong. The stock has steadily declined since then, falling below its all-time low from a few years ago.
Cohen’s promotion is the latest in a series of moves by GameStop to overhaul its leadership and focus on online sales. The company recently fired former CEO Jenna Owens just two years after she was hired, and its chief financial officer, Mike Recupero, left last year. GameStop’s first-quarter earnings report earlier this month showed that its turnaround efforts had accelerated. Still, it warned that it would likely lose money in the second quarter because of ongoing investment in its digital initiatives.
It’s unclear how soon Cohen will unveil a plan to overhaul GameStop’s digital strategy and operations. Still, the activist investor has said he isn’t waiting for the company to take a hit from its slow transformation. He has slashed the company’s debt load, renegotiated store leases, and reduced hiring.
Cohen is also an active philanthropist, giving millions of dollars to various causes, including the Humane Society and the Boys & Girls Clubs of America. In addition, he and his wife established the Ryan and Stephanie Cohen Foundation to support education, medical research, and animal welfare.
GameStop shares have tumbled about 40% in the past year as investors have worried that the company won’t be able to compete with online competitors like Amazon and Walmart, which are aggressively expanding their presence in the gaming market. The company has boosted online sales and is opening more stores in cities with high populations of gamers. But it has also struggled with falling physical sales. Shares have been on a roller-coaster ride, climbing in early 2021 and then plunging after investors became more skeptical that the company’s online strategy would work. They have recovered, however, as investors embrace the company’s recent results and new leadership.
