GameStop Appoints Chewy Founder Ryan Cohen as CEO to Revamp Ailing Business

GameStop, a prominent video game retailer, has made a significant move to revamp its struggling business by appointing Ryan Cohen as its new CEO. Ryan Cohen, the founder of Chewy, is not only the largest individual investor in GameStop but also serves as the chairman of its board. This appointment follows the removal of the previous CEO, Matthew Furlong, who had been tasked with overseeing the company’s turnaround two years prior.

GameStop, known for its meme stock phenomenon on Wall Street in 2021, has been grappling with dwindling sales and a high turnover of executives. The company’s challenges have been exacerbated by the rise of video game streaming and digital game downloads, which have been eating into its profits. Furthermore, the company faces fierce competition from online retailers, including the e-commerce giant, Amazon.

Despite the hopes that come with a new CEO, some analysts remain skeptical about the company’s prospects. Michael Pachter, an analyst at Wedbush Securities, expressed doubts about Ryan Cohen’s ability to navigate the challenges facing GameStop, particularly since Cohen lacks significant experience in managing a physical retailer. Pachter pointed out that the company currently lacks clear direction and sees no path to a turnaround. Moreover, with the inevitable shift from physical software sales to digital downloads, Pachter believes that Cohen’s appointment may lead to GameStop’s demise.

Ryan Cohen will continue to hold a position on GameStop’s board while taking on his new role as CEO. Notably, he will not receive compensation for serving as the company’s president, CEO, and chairman.

In 2021, GameStop made headlines as its shares soared by more than 1,000% in just two weeks. This meteoric rise was largely driven by a group of smaller investors encouraged by the WallStreetBets Reddit community. The GameStop surge was followed by the sudden increase in the stock prices of other struggling companies, highlighting the newfound influence of a new generation of investors who used smartphone apps to make trading more accessible and entertaining.

During GameStop’s stock price surge, many individuals on social media platforms expressed that participating in the Reddit-fueled rallies was an opportunity to challenge hedge funds. The intriguing saga of GameStop’s meme stock phenomenon even inspired the creation of a movie called “Dumb Money.”

Despite this recent appointment, GameStop’s stock saw a 1% decline in early afternoon trading. The Associated Press contributed to this report.