×

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.”