GameStop plunges 22% after abandoning plans to sell itself

GameStop (GME) on Tuesday said it was abandoning its plans to sell the company, “due to the lack of available financing on terms that would be commercially acceptable to a prospective acquirer.”

The stock tumbled over 22% during pre-market trading following the announcement. The largest brick-and-mortar game retailer is estimated to have lost about $360 million in valuation in today’s sell-off.

The company added that the Board is currently on the lookout for a permanent CEO to run the embattled company.

GameStop had started exploring the possibility of a sale in June last year. The company had sold its Spring Mobile unit to Prime Communications for over $700 million in November, in order to cut down on debts and reinvest in the core gaming unit. This transaction was completed earlier this month.

GME shares have traded mostly sideways over the past 12 months as investors remained worried over the game retailer’s future in a market that is dominated by online sellers including Amazon (AMZN), besides the rapidly shifting consumer preference towards game streaming.

The stock is currently trading down almost 30% year-over-year.

Four out of six analysts covering the stock have a Hold rating, while one each recommend Buy and Sell ratings.

When the company last reported earnings results in November, the stock had tumbled 12% on weak fiscal 2018 guidance. Meanwhile, earnings and revenues had managed to top street estimates.

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