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: GameStop names Amazon executives as its new CEO, CFO, surprises market with plans to sell more shares

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GameStop Corp. late Wednesday appointed two Amazon.com Inc. executives as its new top executives, shortly after private-equity investor Ryan Cohen was voted the company’s chairman of the board.

The videogame retailer that became one of the most recognizable names among “meme stocks” also surprised Wall Street with a first-quarter revenue beat, a smaller-than-expected quarterly loss, and plans sell more stock to take advantage of its 1,600% stock gain this year alone.

GameStop
GME,
+0.85%

said it appointed Matt Furlong as chief executive and Mike Recupero as chief financial officer.

Both join from Amazon.com
AMZN,
+0.52%
,
where they oversaw growth initiatives, the company said. Furlong, a nine-year Amazon.com veteran, will start on June 21, and Recupero, who spent 17 years at Amazon.com, will start on July 12, GameStop said.

“These appointments reflect the refreshed board’s focus on building a technology company and investing in growth,” GameStop said in a statement.

GameStop announced earlier Wednesday that Chewy Inc.
CHWY,
-2.14%

co-founder Cohen was voted in as GameStop’s new chairman of the board. Cohen and two of his allies joined GameStop’s board earlier this year, with the expectation they’d lead an overhaul.

Separately, GameStop said it lost $66.8 million, or $1.01 a share, in the fiscal first quarter, compared with a net loss $165.7 million, or $2.57 a share, in the fiscal 2020 first quarter. Adjusted for one-time items, GameStop lost $29.4 million, or 45 cents a share.

Sales rose 25% to $1.28 billion. GameStop said that current-quarter sales “continue to reflect momentum,” with May sales up about 27% from May 2020. The company has halted official guidance.

Analysts polled by FactSet expected GameStop to report an adjusted loss of 82 cents a share on sales of $1.16 billion.

The stock traded nearly 10% lower in the extended session Wednesday after ending the regular trading session up 0.9%. GameStop also said it plans to file plans with securities regulators to sell up to 5 million shares, “from time to time, in ‘at-the-market’ offerings.”

Proceeds would go toward general corporate purposes “as well as for investing in growth initiatives and maintaining a strong balance sheet,” GameStop said. Timing and amounts will depend factors such as market conditions, trading price and others, it said.

The retailer said it had $770.8 million in cash and restricted cash as of May 1. There were no borrowings under its asset-based revolving credit facility and no long-term debt, it said.

GameStop raised nearly $552 million in net proceeds through the sales of 3.5 million shares in April. The company said it “has used and intends to continue using net proceeds to accelerate GameStop’s transformation as well as for general corporate purposes and further strengthening the balance sheet.”

GameStop also disclosed that it received a request for documents from the Securities and Exchange Commission on May 26 in regards to trading activity.

“We are in the process of reviewing the request and producing the requested documents and intend to cooperate fully with the SEC staff regarding this matter,” the company said. “This inquiry is not expected to adversely impact us.”

The SEC said Monday it was monitoring the frenzied trading in light of “the ongoing volatility” of meme stocks.

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