GameStop shares plummet as buyout deal fails to materialise
With no sign of retailer's troubles abating, shares fall 9.9 per cent
The stock slump at GameStop has only worsened this week after the company suffered its worst decline since May 2018.
As "exploratory discussions" with third parties -- instigated on June 19 -- have yet to lead anywhere, the game retailer's shares fell 9.9 per cent on Monday to $14.91, Bloomberg reports.
Hopes that private equity firm Sycamore Partners would buy out the firm have also failed to develop into a deal as of yet.
While GameStop recently received a boost investment from billionaire hedge fund Bridgewater Associates, the company has been facing down a crisis in upper management following the abrupt departure of CEO Michael Mauler after only three months in the role.
Former Xbox boss Shane Kim has been named CEO in the interim, marking the fourth handover of power since November 2017.
The issue was compounded further when investors began piling on pressure for Gamestop to overhaul its retail strategy amid the upheaval.
According to Bloomberg Intelligence analyst Matthew Kanterman, GameStop has been approached with an offer to go private, and "people are waiting for something about that".
GameStop finds itself on unsteady ground and recovery is more than just a case of endurance; it's latest annual financial report showed that revenue was down by $300 million as a result of a fourth quarter "asset impairment", despite enjoying a global sales increase of 7.2 per cent.
However, vice president of merchandising Eric Bright remains optimistic. Speaking with GamesIndustry.biz at E3 this year, he said the retailer is "looking forward to an incredible Q4" thanks to a strong lineup of AAA games during the holiday period.
For the record: This article has been amended to reflect that the buy out deals have simply failed to materialise, rather than officially fall through