GameStop, Having Sold Mobile Unit, Ends Sale Pursuit; Stock Falls

GameStop shares plunged 27 percent Tuesday to $11.28 after it ended efforts to sell due to lack of financing terms acceptable to a prospective buyer. Its board began a review process with third parties in June. The retailer sold its Spring Mobile business this month for $735 million (see 1901160050), and it's evaluating how to use those funds, which could include reducing debt, funding share repurchases or reinvesting in videogame and collectibles businesses to drive growth, it said. GameStop "should be a primary beneficiary from the console refresh in 2020 or 2021," wrote Wedbush Securities analyst Michael Pachter to investors Tuesday, saying the retailer "remains the dominant force in the video game industry’s pre-owned segment." Wedbush lowered its 12-month per-share target by $3 to $15.