GameStop names billionaire Ryan Cohen as CEO in turnaround push

GameStop Corp. (NYSE: GME) has appointed billionaire Ryan Cohen as its CEO and chairman, cementing the activist investor’s control over the struggling video game retailer as he aims to turn it around. Cohen, GameStop’s largest investor, joined the board during the meme stock rally in 2021 and has since been instrumental in guiding the company’s pivot to e-commerce.

Cohen, who gained fame as the founder of online pet products retailer Chewy, has a strong track record in the e-commerce industry. He successfully built Chewy into a powerhouse that he sold for $3.5 billion in 2017. With his appointment as executive chairman at GameStop earlier this year, Cohen initially pushed for an aggressive shift towards e-commerce, aiming to reduce the company’s dependency on physical stores. However, he has since modified his plans and is now focusing on leveraging GameStop’s brick-and-mortar locations as hubs for online order pickups.

The company’s recent quarterly earnings report showed that this strategy is paying off, with strong demand for video games, collectibles, and consoles driving better-than-expected financial results. GameStop posted a smaller loss and higher revenue compared to analyst estimates, indicating that Cohen’s shift in focus is yielding positive results.

Despite these positive developments, there are lingering concerns among analysts about the pace of change at GameStop and Cohen’s track record as an activist investor. Some analysts worry about his mixed success in his attempts to turn around other companies he has targeted, such as Bed Bath & Beyond and Nordstrom. Moreover, GameStop has experienced several executive departures in recent years, indicating challenges in attracting and retaining top talent.

Wedbush analyst Michael Pachter expressed skepticism about GameStop’s long-term prospects, stating, “We remain convinced that GameStop is doomed as declining physical software sales and a shift of sales to subscriptions and digital downloads seal its fate.” The company’s stock has plummeted by more than 80% since its record high in 2021, including a decline of over 7% this year.

The appointment of Ryan Cohen as CEO and chairman reflects GameStop’s struggles in finding effective leadership to navigate its transformation. While Cohen’s successful background in e-commerce and his hands-on involvement in the company gave hope for a turnaround, the challenges GameStop faces in a rapidly changing industry remain significant. Only time will tell if Cohen’s leadership can revive the once-prominent video game retailer.

Disclaimer: This article is meant for informational purposes only and should not be taken as investment advice. Please consult with a professional advisor before making any investment decisions.