Gamestop have continued to fail to find a buyer, leading to the company’s worst decline in share price since May 2018, a fall of 9.9 percent.
A report from Bloomberg revealed that discussions exploring the idea of buying Gamestop with third parties fell apart. This led to the massive fall in share price, which are now worth $14.91. Bloomberg’s report also hinted at the fear that no buyer would be found for the company, leading it to suddenly close as other game retailers such as Toys R Us and Gameseek have.
Any hopes that the private equity firm, Sycamore Partners, would be able to buy out Gamestop have also fallen through.
After Gamestop CEO, Michael Mauler, left the position just three months after taking it, Gamestop has been in a downward spiral that has culminated in the position they’re in at the moment. Even the recent financial encouragement Bridgewater Associates, a billionaire hedge fund, provided hasn’t been enough to bring the company back from their situation.
Currently Gamestop is being led by Shane Kim, a former Xbox Box boss, who is filling in the role of CEO for the period until the company can find someone to take on the role permanently. Kim is the fourth CEO the company has had since November 2017.
Investors put pressure on the company whilst the company’s decline worsened to change their retail strategy, something that definitely hasn’t helped Gamestop any further.
Matthew Kanterman, an intelligence analyst for Bloomberg, said that some people are waiting for a decision to be made about an approach to making Gamestop go private. Supposedly the company has been approached with an offer for making them private, but a decision has not, as of yet, been made.
Even though Gamestop saw a global sales increase of 7.2 percent the company reported a revenue drop of $300 million. This was caused by asset impairment in Q4 of the financial year, but it hasn’t helped investors feel confident in them, and has more than likely been a contributing factor to the share price decline.
Eric Bright, Vice President of Merchandising for Gamestop, said in a recent interview that he was anticipating an incredible Q4 this year. This is an unexpected tone from someone in a senior position at a retailer with a quickly falling share price, but it shows that there’s clearly a plan in place for the big releasing filling up the calendar for the next few months. Investors will have to hope this is the beginning of the tides changing for Gamestop.