June 8 (Reuters) – GameStop ( GME.N ) fell 19% on Thursday and was poised for its worst session in two years after its chief executive was tapped to lead its online expansion.
After the ouster of former Amazon.com executive Matt Furlong and senior shareholder Ryan Cohen as the company’s chief executive, mem-stock traders have taken a hit, promising a digital pivot.
Yet GameStop is poised to wipe out half of its profits and a market value of about $1.3 billion by 2023, one analyst said, with management change the only constant in recent years.
“Without earnings calls, little-to-no investor communication and a coherent strategic vision, it’s hard to get feedback,” Jefferies’ Andrew Yurkwitz said.
“One consistency remains, above changes. In the last 5 years, GameStop has had 5 CEOs and 3 CFOs.”
Uerkwitz is one of the last few analysts covering GameStop after a massive pandemic-era rally sparked by traders rallying together on Reddit, with many brokers saying the stock’s price has diverged from its fundamentals.
The company’s shares were They are down 80% from their high of $120.75 in 2021 Mem-Stock Saga. The stock has a trailing 12-month price-to-sales ratio of 1.38, compared to 0.37 for Best Buy (BBY.N), according to Refinitiv.
GameStop has struggled to deliver on Cohen’s promise to make video game stores Amazon, having seen a number of high-profile exits in recent months, including one from the Chewy co-founder’s private network.
The video game retailer, which still relies mostly on brick-and-mortar stores, reported Wednesday its fourth straight quarterly revenue decline and a bigger-than-expected loss.
“GameStop is a disaster,” said Michael Pachter of Wedbush Securities. “The lack of clear direction and Furlong’s careless termination confirm Cohen’s difficulty in attracting a suitable replacement.”
Reporting by Akash Sriram and Jaspreet Singh in Bengaluru; Editing by Devika Syamnath and Shounak Dasgupta
Our Standards: The Thomson Reuters Trust Principles.
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