GameStop just confirmed that it’s in discussions about a “potential transaction.” This follows the Reuters Monday exclusive, which indicated GameStop holding talks with private equity firms after getting buyout interest.
With the increase in digital video game transactions and competing against a digital competitor like Amazon, GameStop has suffered in sales. Although video game company has expanded into used video games, devices, and digital products, it is no different from other brick-and-mortar retailers in this aspect.
While the used-game strategy helped the company, it has been challenged by developers like EA, Sony, and Microsoft. These companies have their own plans that offer gamers streaming services for older titles that they own.
Back in May, Michael Mauler, Gamestop’s previous chief executive officer, left his post after only three months. Gamestop said the sudden departure was due to personal reasons. Also in May, GameStop said it received a letter from Tiger Management LLC, and stated that it valued investor input.
Fast forward to June, the company hired Shane Kim as their interim CEO. Kim was the former Microsoft Xbox executive and board director.
Over the last 12 months, GameStop’s stock has slid over 32 per cent, which brings its market capitalization to $1.42 billion. This is a big decline from the $9.4 billion in 2007.
In GameStop’s latest press release, it states that the company has no intention of making additional comments about its discussions “until it is appropriate to do so.”
Liked this article and want to read more like it? Check out Zubi Khan’s article on former GameStop CEO Michael Mauler.
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