GameStop stock price: GME tanks after weak earnings and abrupt firing of CEO

Shares of GameStop, the video game retailer and once-beloved meme stock, are back in the news today. As of the time of this writing, GME shares are down over 20% in pre-market trading after the company had one of its most volatile days on record. Here’s what you need to know.

• What’s happened? As of the time of this writing, GameStop shares (ticker GME) are down over 20% to $20.75 per share in pre-market trading. The crash in GME’s share price comes after the company released disappointing Q1 2023 earnings results and, shortly after, fired its CEO, Matthew Furlong.
• Was the termination of Furlong expected? No. It appears to have happened out of the blue and is a bit surprising because, although GameStop’s Q1 2023 earnings were disappointing, the previous quarter saw GameStop post a quarterly profit for the first time in two years. That happened under Furlong’s leadership.
• What has GameStop said about Furlong’s termination? Not much. In a very short press release announcing the termination, GameStop didn’t even mention him by name. In the release, GameStop said that “its Board of Directors has elected Ryan Cohen as Executive Chairman, effective immediately. Mr. Cohen’s responsibilities include capital allocation and overseeing management. In conjunction, the Company’s former CEO has been terminated.” In a separate SEC filing, as pointed out by CNBC, GameStop said Furlong will receive payments and benefits “associated with a termination without cause.”
• How bad was GameStop’s Q1 2023? It wasn’t the best. Revenue for the quarter was $1.24 billion, which is $240 million lower than the same quarter the year before. U.S. sales were also down 16.4%. However, there were some bright spots. European sales were up over 26% year-over-year. And while GameStop did have a net loss of $50.5 million for the quarter, that net loss was moving in the right direction. A year earlier the company had a net loss of $157.9 million for the quarter.