GameStop ( GME.N ) fell about 19% on Thursday, its worst performance in two years, after the surprise departure of its chief executive to expand online fueled concerns that the video game retailer was in trouble.
Matt Furlong, the former head of Amazon.com, is ousted as major shareholder Ryan Cohen is named CEO of the company he has become a favorite of self-stock traders by promising a digital turnaround.
GameStop, however, was expected to wipe out half of its 2023 profit and market value of about $1.3 billion, and one analyst said management change has been the only constant in recent years.
“It’s hard to get an opinion without asking for earnings, little or no investment commitment and no coherent strategic vision,” Jefferies’ Andrew Uerkwitz said.
“One consistency remains, change above. Over the past five years, GameStop has had 5 CEOs and 3 CEOs.
Uerkwitz is one of the few analysts covering GameStop after a massive pandemic-era rally fueled by traders consolidating on Reddit prompted several brokers to say the stock has broken from fundamentals.
The company’s stock is down nearly 80% from its high of $120.75 during the 2021 stock saga. According to Refinitiv, the stock has a trailing 12-month price-to-sales ratio of 1.38, compared to 0.37 for Best Buy (BBY. N).
GameStop has also struggled to deliver on Cohen’s promise to make it the Amazon of video game stores. He’s seen a number of high-profile exits in recent months, including one from the Chewy founder’s personal network.
The video game retailer, which still relies largely on brick-and-mortar stores, reported a straight-line quarterly drop in revenue and a bigger-than-expected loss on Wednesday.
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