Gamestop Fires Its CEO and the Memestock Plummets
Key takeaways
- Gamestop has fired CEO Matthew Furlong and appointed Ryan Cohen for the top job
- The stock dropped up to 20% at one point as poor earnings have proven to be a running theme for the company
- The stock made some recovery on Friday, soaring over 5.6%
Remember Gamestop, the stock that became the champion of Reddit’s WallStreetBets and subject to an insane short squeeze? Well, it’s done a massive shake-up of its executive board and the stock has plunged as a result. Diamond hands might still hold onto the memestock, but it’s not looking good for the company. Here’s the lowdown.
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What’s happening at Gamestop?
Gamestop has officially ousted its CEO, Matthew Furlong, and appointed board chairman and investor Ryan Cohen to the company’s top job. Cohen first took a stake in GameStop in 2020, with his company, RC Ventures, currently holding 11.9% of the company.
Furlong had been in the job for two years but the gaming business had been ailing for some time, posting a fourth quarterly loss in a row this week. In the first three months of its fiscal year, Gamestop reported revenue of $1.24 billion, down from last year’s Q1 $1.38 billion figure.
Other shuffles at Gamestop’s board include a new lead independent directory and its general counsel being named general manager and principal executive officer. Tellingly, the earnings call was canceled.
What was the market reaction?
Investors responded with a vengeance to the news of yet another loss and instability at Gamestop’s board level, with Gamestop’s share price driving down 20% in after-hours trading. The stock has since made some recovery, with the share price on Friday soaring 5.6%.
A canceled earnings call isn’t a good look for the business, leaving investors guessing what Gamestop’s future looks like, and four losses in a row leaves Wall Street wondering if the company can recover. Expect short interest to rise.
The bottom line
Gamestop has become the stuff of legend on Wall Street thanks to what happened with retail investors in 2021. But with weak earnings and reshuffles Whatever happens, it’s unlikely another Reddit rally will be swooping in to save the day.
Gamestop might not be holding up so well in the economic climate, but there are other companies with solid balance sheets that are relatively undervalued out there for the taking. You can make them part of your investment strategy with Q.ai’s Value Vault Kit, which uses AI to dig through the data and weight the holdings each week to help you grow your investment.
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