GameStop Reportedly Looking at Buyout Options

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The well-known video game retailer GameStop is reportedly in talks with firms to discuss potential buyout options, according to people familiar with the matter.

A Reuters report shared on Monday indicated that the sources who know about the potential buyout plans spoke about the possibility of GameStop being bought out after recently receiving buyout interest. Though there’s no confirmation from GameStop that buyout options are indeed being explored, there is at least one firm that’s reportedly in talks with GameStop about buyouts. Reuters reported that Sycamore Partners is just one of the private equity firms that has expressed interest in GameStop, according to the sources.

There’s also been no official confirmation that GameStop is looking to sell itself to a buyer as well. The same sources who parted with the information cautioned that just because these talks are reportedly occurring it doesn’t mean that a sale will actually happen. The sources who spoke on the matter asked not to be named in order to preserve their identities and keep their privacy intact. Reuters also reported that the company has hired a financial advisor to assist in the decision-making process.

Not long after there were whispers of a potential buyout, GameStop saw a surge in stock interests with the company’s shares increasing more than 10 percent. Business Insider shared the image below of the stocks that showed the jump occurring just after 3 p.m., a time that appears to correlate with the timing of Reuters’ report that the gaming retailer is looking into buyout options. The potential buyout, if it turns out to be true, could mean that GameStop could be going private, so it looks like many are looking to get in on the company’s stock options before this happens.

GameStop Stocks
(Photo: Business Insider)
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Reuters added in the report that “the retailer’s stock has slid more than 32 percent over the last 12 months, bringing its market capitalization to $1.42 billion, down from about $9.4 billion in 2007,” a downward trend that gamers can likely attribute to the surge of digital game sales as opposed to physical purchases. Streaming services have also put a dent in GameStop’s revenue as well – subscriptions like Xbox Game Pass and PlayStation Now come to mind.

It’s unclear what all of this would mean for the gamers who shop at GameStop and purchase their games, DLC, electronics, and other collectibles. Neither GameStop nor Sycamore Partners elected to provide Reuters with a comment.