Tag Archives: GameStop

GameStop Shares Fall As It Terminates CEO

GameStop shares plunged Wednesday after it terminated Chief Executive Matt Furlong and elevated Ryan Cohen to executive chairman, the latest shake-up at the videogame retailer, which has been struggling to find new ways to juice sales, The Wall Street Journal reported.

Cohen first joined the board as director in 2021 and rose to chairman that June as part of a restructuring of GameStop’s board. The company then overhauled its executive team, hiring Furlong from Amazon for the CEO job. 

GameStop shares fell 19% in after-hours trading.

Furlong was one of dozens of e-commerce veterans who joined GameStop in 2021 and 2022 to help turn the company’s business around by expanding online sales and launching a marketplace for non fungible tokens, or NFTs. Many of those executives left last year, including the chief growth officer, vice presidents of fulfillment and supply chain systems and the senior vice president of customer service. 

Also last year, GameStop began pulling back on its e-commerce efforts and returned its focus to getting stores to be more efficient.

CNBC reported that shares of GameStop dropped more than 20% in extended trading after the video game retailer announced the termination of Matthew Furlong. It released the news on the same day it reported its revenue dropped and its loss narrowed in its fiscal quarter compared to the year-ago period.

The company didn’t provide a reason for the firing, but noted the change in its quarterly securities filing. 

“We believe the combination of these efforts to stabilize and optimize our core business and achieve sustained profitability while also focusing on capital allocation under Mr. Cohen’s leadership will further unlock long-term value creation for our stockholders,” the filing states.

Cohen took a stake in GameStop in 2020, and in January 2021 he and two other former Chewy executives were named to the retailer’s board as part of an agreement with the company’s management. His investment firm, RC Ventures, currently has an 11.9% stake in GameStop, according to filings. 

Kotaku reported the Chewy founder who sold his home delivery pet food business for billions is a hero among meme stock investors on subreddits like WallStreetBets and SuperStonk. The most die-hard fans treat him more like a prophet than a rich guy who sold his one good idea, hanging onto his every social media post and business hoping to discover clues to the master plan that will make their GameStop stock even more ridiculously overpriced. 

At the same time, Kotaku reported, GameStop workers in the stores themselves continue to suffer. Cost cutting measures and ramped-up sales goals have increased the pressure on store managers and hourly employees, leading to high turnover and entire teams at some locations randomly deciding to quit on the spot.

Personally, I have worked in less-than-adequate retail stores, and I sympathize with the GameStop workers who have clearly had a horrible time at work. The company has swapped out Furlong for Cohen, but that won’t make much of a difference if GameStop continues to put increased pressure on its in-store workers. 

GameStop Launches NFT Marketplace After Laying Off Workers

GameStop fired its top executive and other layoffs at Game Informer. An article on Game Informer, posted on July 8, 2022, stated that GameStop “which is in the process of pivoting its business around crypto” fired one of its top executives and laid off a number of Game Informer staff.

In a filing with the US government, GameStop said it “terminated” CFO Michael Recupero effective immediately. Recupero started as GameStop CFO just about a year ago in June 2021.

In its filing, GameStop said Recupero was fired “without cause,” but the company did not share any further details around the nature of circumstances of his existence. Recupero is not getting a severance payment beyond what was in his initial offer letter but he is entitled to certain pay, rights, and benefits not disclosed in the filing.

CNN reported, from a GameStop memo it obtained, CEO Matt Furlong wrote: “After making more than 600 corporate hires in 2021, and the first half of 2022, we have a stronger understanding of our transformation needs.” He continued, “This has positioned us to right-size headcount across several corporate departments”.

Kotaku reported: While confirmation of the layoffs began pouring in on LinkedIn, it’s not yet clear how many are affected. The layoffs appear to be focused on GameStop’s Grapevine, Texas, headquarters, but all appear to include some staff at Game Informer, the decades-old gaming magazine acquired by the retailer when it bought Funcoland back in 2000.

Wikipedia says that GameStop started with Babbages, a Texas company that was founded in 1984. in October of 1999, Barnes & Noble Booksellers purchased Babbage’s Etc. for $215 million. In May of 2000, Barnes & Noble acquired Funco (which may explain why there were so many Funco Pops in the Barnes & Noble stores). In addition, Barnes & Noble acquired Game Informer, a video game magazine that was first published in 1991. Funco was renamed GameStop, Inc., in December of 2000.

The New York Times reported (in October of 2004) that Barnes & Noble decided “to spin off its majority stake in GameStop, a retailer of video games.”

GameStop has launched an NFT Marketplace, the long-awaited debut of its online marketplace for non-fungible tokens, or NFTs, in a bid to reinvent its business and cash in on consumer adoption of cryptocurrencies and blockchain technology. CNBC reported on July 11, 2022.

According to CNBC, GameStop’s platform, which is now open to the public for beta testing, allows users to connect their own digital asset wallets, including the recently launched GameStop Wallet, the company said in a press release. They will then be able to buy, sell, and trade NFTs of virtual goods. Over time, the marketplace will expand to offer other features such as Web3 gaming, GameStop said.

CNBC noted: The company is trying to win over investors who may have written GameStop off as a legacy retailer with too many store fronts in outdated shopping malls. Now, the company is “tapping into buzzy areas like NFTs for growth”.

Personally, I don’t see GameStop becoming the next big thing for those who want to not only collect NFTs, but also want to stick around for some NFT-connected games. I don’t think GameStop will be able to compete with OpenSea.

GameStop Launches Game Trust Publishing Division

Game Trust logoGameStop has launched a full video game publishing division called Game Trust. Some see this move as a way for GameStop to improve its bottom line, as the companies that create video games shift from physical discs to downloadable digital releases. Anyone who has ever shopped at GameStop knows that the company relies on its sales of physical discs of new and used games.

GameSpot posted on their blog about Game Trust. The new publishing division has already signed new games from independent studies, including Ready at Dawn (maker of The Order: 1886), Tequila Works (maker of Deadline and Rime), and Frozenbyte (maker of Trine).

In March of this year, GameStop announced that it was working with Insomniac, the company that made Ratchet and Clank, on a new game. That new game is called Song of the Deep, and will be coming to PS4, Xbox One, and PC on July 12, 2016. MCV reports that Game Trust is in discussion with 20 other developers.

The GameStop Corp. verified Twitter account (@gamestopcorp) posted some information about Game Trust. They describe it as: “a new way for indie devs to create and introduce IP to a broad gaming audience and for gamers to discover new video games.”

The above tweet is a succinct example of how Game Trust is different from many other game publishing divisions. It isn’t creating brand new video games on its own. Instead, it is acting more like a games label. The indie developers who work with Game Trust will retain full rights to their properties, and GameStop has no involvement in the creative side of the game’s development.

GameStop Set to Acquire ThinkGeek

GameStop logoThinkGeek is an extremely popular online purveyor of all things geeky. Recently, it appeared that Geeknet Inc., (ThinkGeek’s parent company) was going to be acquired by Hot Topic. Things have changed, and it turns out that GameStop is now set to acquire Geeknet, Inc. There are those who are breathing a sigh of relief because they weren’t so keen on Hot Topic.

GameStop posted a press release that states that Geeknet has terminated its agreement with Hot Topic. The press release says that GameStop and Geeknet, Inc., “have entered into a definitive agreement under which GameStop will acquire all of the outstanding shares of Geeknet’s common stock for $20.00 per share in cash.”

The press release goes on to say that this transaction has been approved by the board of directors of both companies. It also says: “The transaction has a total equity value of approximately $140 million, including $37 million of cash and cash equivalents as of March 31, 2015.”

What happened to the potential sale of Geeknet, Inc., to Hot Topic? Geeknet, Inc., has posted the same press release as GameStop did. Either one explains a bit more about the situation.

Geeknet also announced that it had terminated its previously announced merger with Hot Topic, Inc. (“Hot Topic”). Following discussion with both GameStop and Hot Topic, the Board of Directors of Geeknet determined that the GameStop transaction represented a superior proposal. Geeknet will pay Hot Topic a termination fee pursuant to the Hot Topic agreement, for which GameStop has agreed to reimburse Geeknet.

Engadget reported that Hot Topic was offering Geeknet $17.50 per share. It is easy to see why a company like Geeknet would want to take the offer from “the highest bidder”, so to speak.

In short, GameStop will acquire Geeknet, (parent company of ThinkGeek and ThinkGeek Solutions). Right now, one can only speculate about what changes will come as a result. I’ve been a long time fan of ThinkGeek and have made several purchases from it. Now might be a good time to use up my remaining Geek Points… just in case.