Gamestop’s Shares Plunge After CEO Announces Cost-Cutting Measures
Gamestop’s CEO Ryan Cohen unveiled plans to prioritise cost reductions and long-term profitability during the company’s annual shareholder meeting held on Monday. Cohen’s strategic vision emphasised a shift towards a “smaller network of stores,” hinting at potential store closures on the horizon as part of the restructuring efforts. While specific details regarding the scale of these reductions were not immediately disclosed, Cohen underscored the company’s commitment to enhancing shareholder value over the extended horizon rather than resorting to short-term promises or exaggerated claims.
The announcement delivered by Cohen at the outset of the meeting triggered a notable response in the market, with Gamestop’s shares plunging by more than 12% in the aftermath of Monday’s deliberations. Originally scheduled for Thursday, the annual shareholder meeting faced a brief delay due to technical glitches that obstructed numerous investors from accessing the livestream. The hosting company, Computershare, attributed the setback to “unprecedented demand,” fueling heightened anticipation among shareholders eager to glean insights into Gamestop’s strategic direction. Social media platforms buzzed with speculation ahead of the rescheduled meeting, reflecting the heightened interest in the future trajectory of the Grapevine, Texas-based retail chain.
At the epicentre of the meme stock phenomenon, Gamestop captured renewed attention following the reappearance of Keith Gill, popularly known as “Roaring Kitty,” after a three-year hiatus. Gill’s return to YouTube last month rekindled optimism among his devoted followers regarding Gamestop’s potential for a turnaround, particularly in the wake of lacklustre earnings reports. Despite some progress in narrowing losses during the first quarter, Gamestop faced revenue setbacks attributed to weakened sales across hardware, accessories, software, and collectibles categories. The company recently submitted regulatory filings to offer up to 75 million shares of stock, aiming to generate approximately $2.14 billion in proceeds to support its strategic initiatives and operational enhancements.
