Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

GameStop taps Amazon Australia chief as CEO, may sell shares

Stock MarketsJun 09, 2021 07:06PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A GameStop sign is pictured in Pasadena, California March 27, 2013. REUTERS/Mario Anzuoni

By Svea Herbst-Bayliss, Noel Randewich and Eva Mathews

(Reuters) -GameStop on Wednesday named the head of Amazon (NASDAQ:AMZN)'s Australian business as its CEO and said the struggling videogame retailer may sell new shares, sending its volatile stock down 7% in extended trade and disappointing some of its ardent fan base of individual investors.

In a quarterly report that was stronger than analysts forecast, GameStop (NYSE:GME) said it may sell up to 5 million new shares, which would be worth $1.4 billion based on its latest share price.

Matt Furlong, a nine-year Amazon veteran, will succeed George Sherman as chief executive officer. GameStop said Mike Recupero, who spent over 17 years at Amazon, will succeed Jim Bell as chief financial officer.

Furlong will join on June 21, while Recupero, who was chief financial officer of Amazon's North American consumer business, will come on board on July 12, the company said.

GameStop's shares have almost doubled in the past month, approaching their January high. That was when a massive surge driven by investors on Reddit's wallstreetbets trading forum made the stock the most traded on the U.S. market for several days.

The Securities and Exchange Commission requested documents and information related to an investigation into that trading, GameStop disclosed, along with trading in shares of other companies.

AMC Entertainment (NYSE:AMC), Blackberry (TSX:BB), Clover Health Investments and other recently surging so-called "meme" stocks fell more than 4% in extended trade on Wednesday.

Even after falling late on Wednesday, GameStop's stock has gained more than 1,300% in 2021.

Earlier, shareholders elected billionaire investor Ryan Cohen, the company's biggest stockholder and co-founder of online pet supplies retailer Chewy (NYSE:CHWY), as its chairman.

He warned shareholders of more volatility ahead. "As my dad would say, buckle up," Cohen said.

Taking advantage of GameStop's recently rising stock price, Wednesday's announcement of a potential share sale follows the issue of 3.5 million shares in April, which raised about $550 million.

Some on wallstreetbets forum were disappointed with GameStop's latest share-sale plan.

"Guys why didn’t Cohen and his NEW CFO just go to the damn bank and get a 2-3% loan to fund their new plans?," one commenter posted on the site.

Furlong oversaw a small but growing part of Amazon's business as the country head for Australia, a role his LinkedIn profile said he assumed in May 2019. Under Furlong, net sales for the unit that operates Amazon's Australia e-commerce site roughly doubled in 2020 to A$1.12 billion ($867 million) from the year prior, according to a securities filing.

"These appointments reflect the refreshed Board’s focus on building a technology company and investing in growth," GameStop said in the statement.

While the recent rollout of new videogame consoles is likely to benefit GameStop, analysts warned that its soaring stock price has become disconnected from the company's day-to-day business. At least two Wall Street analysts recently dropped coverage of the company.

CORE BUSINESS SHRINKING

Video games are a massive industry that rivals Hollywood by some measures, but GameStop's core business of selling new and pre-owned videogame discs is shrinking as consumers move to downloading games digitally or streaming. The company has lost money for the past three years.

Cohen hopes to transition GameStop into an e-commerce business that can take on big-box retailers. He told shareholders at Wednesday's meeting in Grapevine, Texas that they had "ushered in a whole new era at GameStop," but he declined to provide a detailed plan.

He has said that changes at GameStop should speak for themselves, including hiring new employees from Amazon, Google (NASDAQ:GOOGL) and Chewy.

"What retail investors were looking for was a glimpse into the strategy that Ryan Cohen promised in January," said Wedbush analyst Michael Pachter. "Every day he doesn't reveal his strategy weakens the meme. That's what I think has spooked investors."

GameStop said its net sales for the quarter ending May 1 jumped 25% to $1.28 billion, exceeding analysts' average estimate of $1.16 billion, according to Refinitiv data.

Its adjusted loss per share was 45 cents, beating expectations of an 84 cent loss per share.

In a brief conference call, Sherman gave a summary of GameStop quarterly results and did not take questions from analysts as companies normally do.

GameStop taps Amazon Australia chief as CEO, may sell shares
 

Related Articles

U.S. FTC sues to block Nvidia deal to buy Arm
U.S. FTC sues to block Nvidia deal to buy Arm By Reuters - Dec 02, 2021 1

By Stephen Nellis and David Shepardson SAN FRANCISCO/WASHINGTON (Reuters) -The U.S. Federal Trade Commission on Thursday sued to block U.S. chip supplier Nvidia (NASDAQ:NVDA)...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email