GameStop has failed to secure a buyer

onetheycallEric

Posts: 193   +26
Staff member

Back in June 2018, GameStop began exploring options for a buyout. However, in a recent press release, the company announced that the search for a buyer has ceased, citing "lack of available financing on terms that would be commercially acceptable to a prospective acquiror."

GameStop doesn't elaborate on what exactly that means, but as The Motley Fool highlights, it's likely a combination of unfavorable interest rates and GameStop's significant long term debt.

In a time when digital distribution and the advent of game streaming is eroding physical sales of games, and diluting the pre-owned market, it's likely potential buyers don't see GameStop as a viable investment. GameStop also didn't lay out what the lack of a buyer means for the company; suffice it to say, their long term viability is in question. GameStop did divest their Spring Mobile Business, and the resulting transaction brought in around $735 million for the company. GameStop is evaluating how to best invest those proceeds.

GameStop is also without a CEO, after Michael Mauler left after only three months on the job. GameStop asserts that "the Board is continuing its search process to appoint a highly qualified, permanent CEO and is working with a leading executive search firm."

After the announcement, GameStop's stock price took a nosedive, hitting a 14-year low.

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psycros

Posts: 3,156   +3,293
Maybe they could try being competitive and not lying to customers about everything? It worked pretty good in the previous three decades.
 

Dimitrios

Posts: 657   +470
Renovate the area and throw in rows of tables and computers and have live gaming events with cash prizes or gift cards to their stores. Throw in a hot model or something and GAMESTOP will thrive. Charge gamer's and viewers and autographs be it nerd stuff like Star Trek or other famous people.
 
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mongeese

Posts: 394   +62
Staff member
Renovate the area and throw in rows of tables and computers and have live gaming events with cash prizes or gift cards to their stores. Throw in a hot model or something and GAMESTOP will thrive. Charge gamer's and viewers and autographs be it nerd stuff like Star Trek or other famous people.
Two words: VR arcade
 
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mbrowne5061

Posts: 1,535   +849
They need to re-brand and expand the definition of "game" in their name. Bring in board games and tabletop games, that might be enough to bring in new customers. Then, knock it off with the lies about return policies and other store practices. Yeah, they let you maximize profits per customer, but (obviously) not over the long term if you stop getting return customers.