GameStop CFO Replacement Is Great News

The GameStop announced that CFO Jim Bell is leaving. To alleviate shareholder concerns, there was reassurance that the leaving was not the result of a disagreement.

Therefore, this is a positive, forward-looking shift in a key executive position as described in the press release (underlining is mine):

“The Company has initiated a search for a permanent Chief Financial Officer with the capabilities and qualifications to help accelerate GameStop’s transformation. A leading executive search firm has been retained to support the process. Internal and external candidates will be evaluated.”

The timing is excellent

The dust is still settling from the whirlwind stock trading, and this key executive move shifts the action back to where it matters: GameStop’s fundamentals and growth reconstruction strategy. As described in “GameStop’s New Outlook,” the next earnings conference call (likely in late March) should describe the company’s new goals and plans.

“The key ingredient is the enhanced focus on a growth strategy, spurred by the new, committed board members and fostered by new management additions capable of improving on a known brand name.”

Doing so will set the stage for the actions investors may expect. Also, it will provide the growth metrics for investors to focus on. (It’s too early to expect sales and earnings growth. Time, resources and actions are needed first to produce the major shift required for GameStop to ride the next uptrend fully and profitably.)

So, is it time to buy the stock?

Even if the excitement builds on what management reveals on the earnings call, it’s still early days for the stock. First, the short-term “hangers-on” and “reentrant” traders need to be washed out. That will allow the stock to move away from the wild times and down to a sound foundation for attracting long-term investors.

The bottom line

GameStop just released an early good-news report to whet investors’ appetites. Next comes the first course.