What happened
Shares of GameStop (GME 3.97%) are falling 6.4% on Friday at 10:25 a.m. after the video game retailer announced it had fired its CFO while also preparing to fire an unspecified number of employees.
The move comes after GameStop announced it was splitting its stock by a 4-to-1 ratio for shareholders of record on July 15.
Image source: Getty Images.
So what
The video game retailer is in the midst of a transformation of its business as the industry inexorably moves to one that is online and digital. While no grand plan has been laid out, some of the changes that have come to light are moves in the cryptocurrency market with a new non-fungible token (NFT) wallet that will be useful for the NFT marketplace it intends to unveil later this year.
However, the collapse of the crypto market has also seen the NFT market crash, with sales volume of the tokens down some 93% since January.
According to an internal memo reported by Axios and seen by Bloomberg, CEO Matt Furlong told employees it was critical that "everyone in the organization must become even more hands-on and embrace a heightened level of accountability for results."
Bloomberg says CFO Mike Recupero was fired because "he wasn't hands-on enough" and acted as though GameStop had become Amazon.com, perhaps an allusion to chairman Ryan Cohen's exhortation that he wanted GameStop to be "the Amazon of gaming."
Now what
While GameStop's stock gained 15% on the stock split news, an announcement investors have been waiting for since March, when the video game retailer inflated its share count from 300 million shares to 1 billion shares, it's now paring back some of those gains.
