One analyst has had enough of GameStop’s ongoing leadership issues and issued an epic takedown of the company as he reiterated his ‘sell’ recommendation for the video game retailer.
Benchmark’s Mike Hickey, in a note to investors following the retailer’s latest earnings announcement, said he has “no confidence in management” and was especially bewildered at the promotion of Rob Lloyd to chief operating officer.
“Under Rob’s leadership as CFO, the stock peaked in Nov. 2013 at nearly $60, and subsequently fell an astonishing 77% as their poorly planned and miss executed diversification strategy failed, in our view,” Hickey wrote. “We believe the company is in dire need of new leadership, before prior/current board members/executives run the company to ruin.”
GameStop has had a string of bad luck in the executive office. Longtime CEO Paul Raines resigned in February due to illness (which later took his life). And in May, his replacement Michael Maulter resigned abruptly for “personal reasons”.
The company, on Thursday, named board member Shane Kim, who formerly ran Microsoft’s Xbox unit, as interim CEO until a permanent one is named. Kim has a solid background in the industry and is generally well liked. But the temporary nature of that role didn’t sit well.
“Management spent an agonizing amount of time congratulating each other on the conference call, including the promotion of Rob Lloyd to COO, and suggestive commentary that he would be a strong potential for CEO candidate, which would continue the embarrassing trend of promoting internal candidates to key executive positions where they offer limited value, in our view,” said Hickey.
GameStop shares were flat in mid-morning trading Friday.