'They Can Hire Jeff Bezos and It Won't Make a Difference': GameStop (GME) Taps Senior Executives From Amazon as New CEO and CFO, Tops Q1 Earnings Estimates and Says May Sell Up To 5 Million Shares
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Shares of meme stock GameStop (NYSE: GME) are down more than 6% in pre-open Thursday after the company reported Q1 results.
GME said it posted a loss per share of $0.45 per share on an adjusted basis, which is much better than a loss of $0.84 per share expected. Sales for the quarter came in at $1.28 billion to again top the $1.16 billion expected from the Street.
The company didn’t provide a 2021 outlook but said May sales were up around 27% compared to last year.
Moreover, GameStop announced it has appointed Matt Furlong as Chief Executive Officer and Mike Recupero as Chief Financial Officer. Mr. Furlong and Mr. Recupero joined Amazon, where both occupied senior roles.
Their appointment follows the new strategy as the company is aggressively trying to shift to online sales. Furlong has plenty of e-commerce experience as he was most recently a Country Leader who oversaw Amazon’s Australia business.
Recupero’s previous role was Chief Financial Officer of the North American Consumer business after serving as Chief Financial Officer of Prime Video.
“These appointments reflect the refreshed Board’s focus on building a technology company and investing in growth,” the company said in a statement.
Loop Capital analyst Anthony Chukumba is still pessimistic about the company, despite these high-level hirings.
“It’s great that these guys worked at Amazon. Amazon is a very successful retailer that I do cover, that I’m very familiar with, but at the end of the day, GameStop’s problems have very little, if anything, to do with e-commerce,” he told CNBC.
“Their problem is not that they’re not a good omnichannel retailer. The problem is that gamers are increasingly downloading video games. Look, they can hire Jeff Bezos when he comes back from space. ... It’s not going to make a difference. The symptoms are not aligned with the medicine that the doctor is giving them. You can hire anyone you want from Amazon — not going to make a difference.”
GameStop also announced it will file with the U.S. Securities and Exchange Commission (SEC) to potentially sell up to 5 million shares of its stock in “at-the-market” offerings.
Further, it disclosed that past trading activity is being investigated by the SEC.
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