×
You will be redirected back to your article in seconds

GameStop Announces Plans to Buy Back 12 Million Shares

GameStop plans to buy back 12 million shares in the company, it was announced on Monday. This comes just months after the retailer predicted dismal 2019 sales and experienced its biggest drop in stock value since 2004.

So far it’s had a positive result. Shares in the company jumped 7.2% after GameStop laid out its plans to launch a “modified Dutch auction” – a complicated sounding term which refers to a process that allows shareholders to indicate how many shares of common stock they want, and at what price within a given range. GameStop is offering to purchase up to 12 million shares of the Class A stock at a price no greater than $6.00 and not less than $5.20 per share.

“While improving our operations and capturing efficiencies in our business to drive returns for our shareholders continues to be the top priority for the new leadership team, we view the purchase of our shares to be financially compelling at this time,” said Chief Executive George Sherman, GameStop’s new chief executive officer as of March. Sherman replaced Shane Kim, who served as interim CEO from May 2018. Shane had taken over the role after Michael Mauler resigned after just three months on the job.

Despite being the largest brick-and-mortar games retailer in the U.S., the company has struggled to find relevance in an era of digital game sales and popular online retailers like Amazon which offers more competitive pricing and direct shipment to consumers.

For this fiscal year, the company said it is “embarking on a cost savings and profit improvement initiative designed to strengthen the organization for the future and support long-term improved financial performance and profitability.”

“As we think about 2019 and beyond, we recognize the challenges facing our pre-owned video game business and are prepared to address them as we continue to evolve our business model going forward,” said Rob Lloyd, chief operating officer and chief financial officer, in April’s financial report. “Importantly, we will continue to leverage our powerful brand to drive growth and, with a new cost savings and profit improvement initiative in place, we will focus our efforts on driving profitability. GameStop is a leader in the video game industry, and we remain committed to capitalizing on our leadership position to discover new and unique ways to meet our loyal customers’ entertainment needs and attract new customers.”

Popular on Variety

More Gaming

  • Apple Arcade

    Apple Officially Launches Apple Arcade Game Subscription Service

    Apple officially cut the ribbon for its new game subscription service Thursday: Priced $4.99 per month, Apple Arcade offers unlimited access to over 100 exclusive games. Apple Arcade was released alongside iOS 13, the latest version of Apple’s mobile operating system. Some of the titles available through the subscription package include “Lego Brawls” from Lego [...]

  • Venn co-founders

    VENN Raises $17 Million to Launch a Cheddar-like TV Network for Gaming

    Video game industry veterans Ariel Horn and Ben Kusin have raised a massive $17 million seed funding round to launch a new gaming-focused TV network called VENN. Short for Video Game Entertainment and News Network, VENN wants to mix esports with Twitch-style video game streaming and other gaming-related entertainment content when it launches in 2020. [...]

  • JoJo Siwa'The Angry Birds Movie 2'

    Nickelodeon Star JoJo Siwa Gets Her Own Dance-Tour Mobile Game (EXCLUSIVE)

    Fans of JoJo Siwa will be able to join the teen influencer’s dance squad on stage — virtually — in a new mobile game. In “JoJo Siwa — Live to Dance,” players will become part of the Nickelodon and YouTube star’s worldwide tour on her professional dance team and experience what it’s like to be [...]

  • Game Awards OrchestraThe Game Awards, Show,

    The Game Awards 2019 Sets December Date, Will Live-Stream Across 45 Platforms

    The Game Awards 2019, the fifth annual video game industry kudosfest, will be held Dec. 12 in Los Angeles and will be live-streamed for free again on more than 45 different platforms worldwide. The Game Awards is an annual celebration of video games and the people who make them, created and executive produced by Geoff [...]

  • HTC Vive Cosmos

    HTC Replaces HTC Vive With New $699 Vive Comos VR Headset

    HTC is getting ready to retire the headset that was central to its expansion into the virtual reality market 3 years ago: The company announced on Thursday that its new Vive Comos headset will effectively replace the original HTC Vive, which was first released in April of 2016. “It was time to upgrade our consumer [...]

  • Sohu logo

    China's Sohu Seeks Games Consolidation With $500 Million Bid for Changyou

    Sohu, one of China’s Internet pioneers, is offering to buy out its games subsidiary Changyou in a deal that values Changyou at $532 million. Both companies currently have their shares listed on NASDAQ, but if the deal goes ahead Changyou would lose its separate stock listing. Sohu, which has interests covering search, digital advertising and [...]

More From Our Brands

Access exclusive content