Shares of video game retailer GameStop soared Wednesday amid reports the company is working to sell itself to a private equity firm.
Shares soared to nearly 14% in early trading after a Dealreporter story saying the company is working with formal advisers to broker the deal. GameStop, in June, announced it was speaking with potential buyers as it has regularly lost market share.
In fiscal 2017, GameStop reported a net loss of $105.9 million. While officials publicly continue to express optimism and point to the success of its ThinkGeek products division and game hardware sales, the company’s bread and butter, game software sales, has been losing steam for some time now.
That’s because gamers are increasingly opting for digital purchases directly from game publishers or console manufacturers. The industry is also moving towards a Netflix-like streaming/subscription model which casts a cloud over GameStop’s future sales.
GameStop, historically, has relied on used games sales for a large percentage of its profits.
There’s no word, at present, how far along GameStop might be in its talks to take the company private or who it is working with to secure funding.
Shane Kim, who led Microsoft’s Xbox division during the bulk of the Xbox 360 era, is current acting CEO at the company, assuming that role after CEO Michael Mauler left the job after just a few months for “personal reasons”. (The company has steadfastly refused to discuss the circumstances of his departure.)