GameStop, whose share prices have skyrocketed by over 1500% since the beginning of the year, has announced a 25% increase in sales during the first quarter of the year compared to the same quarter last year. Although it fell short of providing a growth forecast for the next quarters, it asserted that the sales increment is no fluke, as it’s already registered a 27% sales increment in May compared to the same month last year.
The company is now on the verge of pivoting from a brick-and-mortar company to a full-blown online service, hiring several former Amazon executives and hinting that it may sell as many as 5 million additional shares this year to raise funds for the growth plans.
It announced former Amazon executive Matt Furlong as its incoming new CEO. Furlong served on Amazon’s board for nearly 9 years – his roles included spearheading the growth of Amazon’s Australia business as well as serving as the technical advisor to the head of Amazon’s North America consumer business.
Other former Amazon executives now on GameStop’s payroll include Mike Recupero, who served Amazon for over 17 years; Jenna Owens – its new chief operating officer; Matt Francis – its first chief technology officer, and Elliot Wilke, its chief growth officer.
With seasoned online business executives now in its ranks, GameStop is looking to transform into an online business model that can compete favorably with incumbents like Walmart, Sony, and Microsoft.
GamStock shares have rallied by an astounding 1504% so far this year, and the company is now looking to consolidate on its meteoric rise by shoring up sales. The company has also cleared off its long-term debt and has suppressed losses well below the projected levels.
However, many experts still don’t believe that the company has what it takes to maintain its phenomenal growth.
Loop Capital analyst Anthony Chukumba told CNBC that the video game retailer’s challenges are far more intricate than any new executive can unravel.
“It’s great that these guys worked at Amazon. Amazon is a very successful retailer that I do cover, that I’m very familiar with, but at the end of the day, GameStop’s problems have very little, if anything, to do with e-commerce,” Chukumba said on CNBC’s “Closing Bell.”
“Their problem is not that they’re not a good omnichannel retailer. The problem is that gamers are increasingly downloading video games,” he added. “Look, they can hire Jeff Bezos when he comes back from space. … It’s not going to make a difference. The symptoms are not aligned with the medicine that the doctor is giving them. You can hire anyone you want from Amazon — not going to make a difference.”
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