GameStop names Amazon veteran as CEO; gross sales speed up – KIRO 7 Information Seattle

NEW YORK – (AP) – GameStop, the video game retailer whose manic stock movement has captivated Wall Street this year, said Wednesday that it has brought in a pair of Amazon veterans as the new chief executive and chief financial officer to join the much-anticipated to help turn digital.

Matt Furlong, who most recently headed Amazon’s Australian operations and spent nine years with the company, will take over as CEO on June 21. GameStop also said that Mike Recupero, who most recently served as CFO of Amazon’s North American consumer business, will begin as chief financial officer on July 12th.

GameStop’s stock was on a wild rocket ride, rising more than 1,500% this year as waves of investors with smaller pockets raised hope that it can turn into an e-commerce powerhouse after the sale in hers brick-and-mortar stores had stalled. GameStop said Wednesday that the Securities and Exchange Commission officials are conducting an investigation into trading activity in its stocks and shares of other companies. GameStop said it doesn’t expect the investigation to harm it.

Investors have put much of their hope in Ryan Cohen, a major investor who co-founded Chewy, the online pet supplies seller.

GameStop said Wednesday that it is still losing money, posting a net loss of $ 66.8 million for the three months ended May 1. But that’s not as bad as the $ 165.7 million loss last year, and the $ 1.28 billion in revenue was higher than the $ 1.16 billion analysts expected. Sales rose 25% despite the company closing some of its stores.

GameStop became the face of the “meme stock” craze earlier this year when a fanatical group of smaller-pocketed and novice investors encouraged each other to get on board. That helped trigger a “short squeeze” that blew up the stock.

Professional investors had sold most of GameStop’s stock “short” and essentially made bets that would benefit from a fall in the price. They were skeptical that GameStop had a bright future ahead of them, given the shift in video game sales to online channels and away from GameStop’s stores. But after the stock started rising sharply, these short sellers had to buy GameStop stock to get out of their bets, creating a feedback loop that drove the stock price further.

The stock hit a record high of $ 347.51 in late January, but fell back below $ 41 in a matter of weeks. It has since risen again, closing at $ 302.56 on Wednesday.

GameStop took advantage of that surge by selling shares earlier this year to raise nearly $ 552 million. This helped the company end the final quarter with $ 770.8 million in cash and on hold. GameStop plans to use its increased financial strength to accelerate its transformation. It has already got rid of all of its long-term debt.

GameStop didn’t make a profit forecast, believing that revenue growth is the best way to measure its performance. The company said sales in May were up about 27% year over year.

GameStop’s stock lost 7% in trading after the market closed.

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