GameStop has announced that it is no longer looking for a buyer, causing stock prices to drop 25 percent today. The video gamer retailer has been facing increasing financial difficulties as brick-and-mortar video game stores lose out to digital purchases.
GameStop began exploring the possibility of selling itself to another company last June but announced today that this is no longer an option the company is pursuing. In a blog post announcing the news GameStop says, "Board has now terminated efforts to pursue a sale of the company due to the lack of available financing terms that would be commercially acceptable to a prospective acquirer."
GameStop's stock dropped 25 percent to $11.28 in early morning trading as a result of today's announcement.
Wedbush Securities analyst Michael Pacther told Variety that GameStop could be having a hard time finding lenders who believe GameStop is a good investment. This is due to the rise in video game streaming services from companies like Google, Amazon, and Apple, as well as the possibility of disc-less game consoles like the one Xbox is rumored to be working on. All of which could hurt GameStop's sales which rely on physical media.
GameStop has tried to pivot to used games and physical merchandise sales in recent years, acquiring nerd paraphernalia retailer ThinkGeek in 2015. But revenue generated from those markets haven't been enough to keep GameStop in a financially healthy state. GameStop continues to face stiff competition from growing digital sales, and new digital marketplaces like subscription services.
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