GameStop has confirmed that it has begun buyout talks with third parties, according to a statement made by the company today. The retailer has been in trouble over the past few years with sales dropping due to the prominence of online stores and digital downloads.
According to the statement, the company is currently “in exploratory discussions with third parties regarding a potential transaction.” Although the company also stated that there is no assurance that the talks will results in any sort of agreement. The company’s sales has been slumping over the past couple of years, specifically of its physical games and consoles, due to the aforementioned rising popularity of online stores like Amazon.com and the convenience of purchasing games digitally and downloading them directly onto a console.
Last year, the company shuttered over 150 of its 7,500 GameStop stores across the globe and its stock has dropped by 32 percent over the past year, bringing its market capitalization down to $1.42 billion from $9.4 billion in 2007. The company also reported a loss of $105.9 million for the 2017 fiscal year. Additionally, the company’s CEO Michael Mauler resigned from his post only three months after taking it, reportedly for “personal reasons.” Former Microsoft Xbox executive and board director Shane Kim was taken in as interim CEO in June.
Surprisingly, the company’s stock rose by 11% when rumors of the buyout talks began coming out.
In spite the company’s used games business doing relatively better and the company expanding its non-gaming business to include other gadgets and even collectibles, it looks like the company will still be forced to sell off its business if the opportunity arises. The company ended its statement by noting that no further comments will be made regarding the talks “unless and until it is appropriate to do so” so it’s safe to expect that we won’t hear anything official until a significant development occurs.