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Forums - Gaming Discussion - GameStop decides to stop trying to sell the company

As reported by CNBC here: https://www.cnbc.com/2019/01/29/gamestop-has-decided-to-end-its-process-to-sell-the-company.html

Basically, nobody can finance the deal on reasonable terms, so they aren't getting good offers.  At least, that's what I get from reading between the lines.  Experience tells me that the reason prospective buyers can't get acceptable financing terms is that lenders see too much risk of bankruptcy in GameStop.  So, this is significantly bad news for gaming retail in the medium term.

Edit to add/clarify:  Saying that lenders see bankruptcy in the future is probably an oversimplification.  It's more likely that lenders see few good options to long term profit growth, and/or insufficient free cash flow to service a bunch of new debt.  Put another way - lenders likely see adding *new* debt as a path to bankruptcy, not that Gamestop is unable to service existing debt.  

Last edited by VAMatt - on 29 January 2019

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Well, that is really worrying. If the y can't turn the ship around back to profits and can't be bought by someone to get someone else to do it for them, what other options do they have?



You know it deserves the GOTY.

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I bet they regret not selling like 8 years ago. They would have gotten a fortune.



Darwinianevolution said:
Well, that is really worrying. If the y can't turn the ship around back to profits and can't be bought by someone to get someone else to do it for them, what other options do they have?

Close down because the business model does not work anymore today. The only reason it still exists today is probably name recognition. Should've gone the way of Blockbuster years ago.



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Maybe if they offered disk protection along with the sale of the company? I mean it is pre owned, who knows if it will run or not.



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Gamestop has such a bad rep here in the states, and I imagine the same for the rest of the world. And just yesterday I found out that they oversold KH3 pre-orders and had to cancel on some buyers. I would love nothing more than to see Gamestop go the way of Blockbuster.

The Gamestop near me has started automatically adding the warrantee into the sale of a game unless you explicitly ask them to remove it. This is beyond sketchy.



RaptorChrist said:

Gamestop has such a bad rep here in the states, and I imagine the same for the rest of the world. 

In France, there is no GameStop but a company GameStop bought in 2008 called Micromania and and  have a bad rep



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Darwinianevolution said:
Well, that is really worrying. If the y can't turn the ship around back to profits and can't be bought by someone to get someone else to do it for them, what other options do they have?

Well, it is important to note that Gamestop *is* profitable.  Profits have been steadily declining.  But, they still are making money.  They're not about to disappear tomorrow.  They just have to turn the ship around.  

It is also notable that they just sold their cell phone business and got $725m of cash.  Hopefully, they'll use that money to pay down debt, rather than trying to grow into new categories.  If so, they'll likely ensure that the company is around for a good while still, and may have time to shrink the store count, or otherwise evolve.  If they use it to try to grow the business into some other loosely related category, they'll likely fail sooner, due to an unsustainable debt load.  



GameStop bought eb games and is the only notable physical games store in Montreal, so that would be kinda sad if that option is taken from me as well



Just a guy who doesn't want to be bored. Also

I'm actually glad this is happening and they go bankrupt. They muscle their way stopping MS from pushing a digital world when Xbox One was announced plus they really rip off people with their buyback system.