(Reuters) – GameStop Inc (GME.N) fell nearly 19 percent on Thursday and was poised for its worst session in two years after the sudden exit of a hand-picked CEO to spearhead its online expansion raised concerns about the ailing video game business.
The ousting of former Amazon.com CEO Matt Furlong came alongside the appointment of chief shareholder Ryan Cohen as CEO of the company he turned into a favorite of auspicious stock traders with promises of a digital pivot.
However, GameStop was set to erase half of its 2023 gains and about $1.3 billion in market value, with one analyst saying the management shake-up was the only constant in recent years.
“It’s hard to have an opinion without an earnings call, little or no communication with investors, and a lack of consistent strategic vision,” Jefferies’ Andrew Urkowitz said.
“One consistency remains, changes are at the top. Over the past 5 years, GameStop has had 5 CEOs and 3 CFOs.”
Uerkwitz is among the last of the few analysts to cover GameStop after a massive pandemic-era rally, prompted by traders gathering together on Reddit, prompted several brokerages to say the stock price had ripped off its fundamentals.
Shares of the company are down nearly 80% from a peak of $120.75 it hit during the 2021 meme-stock saga. The stock has a 12-month delayed sales price-to-sales ratio of 1.38, compared to Best Buy (BBY.N) of 0.37, according to Refinitiv.
GameStop has also struggled to live up to Cohen’s pledge to make it the Amazon of video game stores, having seen several high-profile exits over recent months, including those drawn from the Chewy founder’s personal network.
The video game retailer, which still relies mostly on brick-and-mortar stores, reported its fourth consecutive decline in quarterly revenue on Wednesday and a bigger-than-expected loss.
“GameStop is doomed,” said Michael Pachter of Wedbush Securities. “The lack of clear direction and Furlong’s stiff finishing all ensure that Cohen will have difficulty attracting a qualified replacement.”
Additional reporting by Akash Sriram and Jaspreet Singh in Bengaluru; Editing by Devika Siamnath and Shonak Dasgupta
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