GameStop Confirms Talks For Potential Buyout
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The video game retail store GameStop is reportedly looking for a buyer. Reuters reports that the corporation is in talks with private equity firms after having received interest in a buyout. The company has also hired a financial advisor, according to people familiar with the matter.
Though it is hosting talks, the company is undecided on whether it will decide to sell. Still, shares of the company rose this week upon news of the potential buyout. This may have been prompted in part by a letter the company received in May from hedge fund Tiger Management LLC, calling for changes at the company and a strategic review.
The company confirmed "exploratory discussions" in a statement, but made no commitment to sell and preempted further comments. "GameStop does not intend to make any additional comments regarding these discussions unless and until it is appropriate to do so," the statement reads.
GameStop has had a rocky year. The stock has slid more than 32% over the last 12 months, and in May its newly named CEO Michael Mauler announced he was leaving after only three months on the job. Former Xbox executive Shane Kim is currently serving as interim CEO.
As the video game industry has moved more into digital distribution, GameStop has pivoted deeper into used game sales and pop culture collectibles. The used market may be under threat now as well. Services like Xbox Game Pass and PlayStation Now offer a wide library of games for a subscription price, which could replace used games as a cheap option for older titles for some gamers.