GameStop has been in a tough place for quite some time now. The company’s profits haven’t been satisfactory, their stock has fallen over the past five years, and there has been a tremendous amount of upper management turnover as the company attempts to get its legs back under it. Nothing seems to be working.
Recently reports circulating suggesting that they were looking for a buyer and had narrowed it down to two candidates. Numerous outlets reported that a sale would likely be completed sometime in February, but it seems plans have changed quite drastically. GameStop announced today that it is no longer looking for a buyer. This is due to ”
lack of available financing on terms that would be commercially acceptable to a prospective acquirer.”
This paints a pretty bleak picture for the company going forward. They’ve been floundering on their own, and potentially interested investors appear to have been scared off. Interim CEO Shane Kim (who stepped into the role when the previous CEO quit just three months into the job) will continue to guide the struggling company while the Board of Directors looks for a permanent replacement.
In order to stay afloat, GameStop sold off their Spring Mobile business for $735 million, but that’s not enough to get them completely out of debt. Additionally, they’ll likely need to make new, successful investments in order to increase revenue. The Board is weighing all of its options currently, but things don’t look good. Following today’s announcement,
GameStop’s stock plummeted by an astounding 28%. That should give you an idea of how investors feel about the company’s chances without a buyout.