GameStop Tumbles as Investors Lose Hope in Buyout Deal Emerging
(Bloomberg) -- GameStop Corp. suffered its worst stock decline in more than three months as investors lost hope that the embattled video-game retailer will clinch a deal to be acquired.
The shares fell as much as 9.9 percent to $14.91 on Monday, the biggest intraday plunge since May 18.
GameStop had rallied in recent months, lifted by speculation that it was in talks to be bought by a private equity firm like Sycamore Partners. The company confirmed on June 19 that it was holding “exploratory discussions” with third parties about a potential deal. But it warned at the time that the talks could lead nowhere.
“It’s been a roller-coaster ride,” said Matthew Kanterman, an analyst at Bloomberg Intelligence. “They’ve been approached with a proposal to go private -- people are waiting for something about that.”
A takeover would bring relief to investors reeling from a more than four-year stock slump. The Grapevine, Texas-based company has been struggling to remain relevant in an era when more and more gamers download their software, rather than buying it at a store.
Barron’s spotlighted the challenges in its latest cover story, noting that the video-game industry is shifting toward cloud computing -- to the detriment of hardware makers and retailers.
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