GameStop said Tuesday it has abandoned its attempt to sell the company, sending the stock plunging 27.2 percent.
The stock decline amounted to a loss of more than $430 million in market capitalization. The stock hit a 52 week low at $11.11 but closed at $11.28.
The company said the board determined there was not enough available financing on terms that would be acceptable to a prospective buyer.
Gamestop previously sold its Spring Mobile business in a deal that was completed this month for about $735 million in immediate cash proceeds. The company said while its board is still evaluating the best way to spend the proceeds, it may use the money to pay down debt, fund share repurchases and/or reinvest in core businesses including video games and collectibles.
GameStop said it is working with an executive search firm to find a permanent CEO.
Here's GameStop's full statement:
GameStop Corp. (NYSE: GME) today announced that its Board of Directors has concluded its previously announced efforts to pursue a sale of the company in conjunction with its broader review of strategic and financial alternatives.
In June 2018, GameStop's Board, together with outside financial and legal advisors, commenced a review of a wide range of alternatives to enhance shareholder value. The Board undertook a comprehensive review process, including discussions with third parties regarding a potential sale of the company. GameStop's Board has now terminated efforts to pursue a sale of the company due to the lack of available financing on terms that would be commercially acceptable to a prospective acquiror.
As part of the Board's review process, as previously announced, the company sold its Spring Mobile business. This transaction was completed on January 16, 2019 and generated approximately $735 million in immediate cash proceeds. The Board continues to evaluate the optimal use of these proceeds, which could include reducing the company's outstanding debt, funding share repurchases, reinvesting in core video game and collectibles businesses to drive growth, or a combination of these options.
Furthermore, the Board is continuing its search process to appoint a highly qualified, permanent CEO and is working with a leading executive search firm.