GameStop Stock Value Plummets After Reversing Plan To Sell Company
The retail market for video games has faced many changes and challenges the past few years. A rise in the popularity of digital downloads and online shopping have made buying video games in person a less primary source of shopping for many, but there are still quite a few gamers who prefer brick and mortar shopping. GameStop took several measures the past few years to meet these changes, including introducing more geeky merchandise into their store. Rumors recently arose that the company would be seeking a buyout, but now it seems that those plans have fallen through, which has now led to GameStop stock value taking a nosedive today.
GameStop recently posted a news release on their official company website stating their recent update on the buyout situation. As far back as June of last year, several sources reported that GameStop would be looking to sell the company to a private equity firm, in the hopes of giving the company the resources and opportunities it needs to survive the rapidly changing retail landscape. Sycamore Partners and Apollo Global Management were two such potential buyers that were bidding for the GameStop kingdom, but alas it seems that these talks have ceased for both potential victors. The news release gives the following reason for this halted plan:
GameStop’s Board has now terminated efforts to pursue a sale of the company due to the lack of available financing on terms that would be commercially acceptable to a prospective acquirer.”
This news unfortunately for GameStop seemed to negatively impact their stock value, as it nosedived over 4 points today on the New York Stock Exchange, nearly 30% of their total value. That said, not all is lost for GameStop’s potential plans for longterm growth. They did confirm that they received over $700 million in cash for the sale of their Spring Mobile business, which they plan to invest in projects to boost the company’s retail forays. They are also looking for a new CEO that will provide the leadership they need to meet the new needs of their customer base. Time will tell if GameStop can weather the retail storm, or see their ship sink in the Amazon river.
What do you guys think about this sudden drop in GameStop stock value? Let us know in the comments below! Be sure to stay tuned for the latest gaming news, such as the report claiming that Sony is only focusing on PS5 games this year, here on Don’t Feed the Gamers! Follow us on Twitter to see our updates the minute they go live!
Cory Lara1652 Posts
A royally radical and totally tubular 90s kid, Cory has a passion for all things nerdy, particularly gaming and nostalgia. While an accountant by day, he strives to be as creative and humorous as possible in his free time, be it here writing on Don't Feed the Gamers, or making dumb satirical posts on his Twitter, Youtube, Facebook and Instagram accounts.