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GameStop terminates Matt Furlong as CEO; shares plummet

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(Reuters) -GameStop fired CEO Matt Furlong two years after hiring him and appointed billionaire Ryan Cohen as executive chairman, sending the company’s shares down 20% in extended trading.

A former executive at Amazon.com, Furlong joined GameStop in 2021, just months after the company was at the center of a “meme-stock” trading frenzy where a bunch of social media-armed traders talked up the value of the stock.

The company did not say why Furlong was terminated and did not immediately respond to a Reuters request for comment seeking details. The videogame retailer also said it would not be holding an earnings call.

Billionaire investor Cohen, who co-founded online pet products retailer Chewy, has been serving as chairman of GameStop since 2021 and is also a majority shareholder of the Texas-based company. Cohen has been at the forefront of driving the company’s transition into e-commerce and has been responsible for the shakeup in its top management.

GameStop posted its fourth consecutive fall in quarterly revenue and missed market estimates, as consumers dialed back non-essential spending in an uncertain economy.

The videogame retailer reported revenue of $1.24 billion for the quarter ended April 29, compared with analysts’ average estimate of $1.36 billion, according to Refinitiv.

Despite legacy titles such as Electronic Arts-owned “FIFA” and Activision Blizzard’s “Call of Duty” seeing a boom, consumers being cautious with their spending has dented sales at the retailer’s brick-and-mortar stores.

GameStop’s core retail business of selling new and pre-owned videogame disks has also been dwindling as consumers move to downloading games digitally or via streams.

The company has been pivoting toward a more online-focused model and expanding from the current mainstay of brick-and-mortar stores as competition heats up from bigger retailers.

(Reporting by Samrhitha Arunasalam; Editing by Krishna Chandra Eluri)

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