Rumor: GameStop in Takeover Talks

Public game retailer GameStop had a great day on Wall Street, mostly because there are rumors flying around that they could be bought out by an unnamed private equity group. GameStop has declined to comment on these rumors, which all but confirms that there’s at least something in the works. with the company.

The decision could be a good one for the company, depending on the price tag. Reports say that the number on the table right now is $4.94 billion, which is much higher than their current estimated worth of $3.27 billion. Even that number may be high, considering that investors have been snatching up GameStop stock over the past few days as news of the potential purchase started surfacing.

Selling also makes sense, because it would likely mean that the company would again go private. Anyone can tell you that gaming is only getting more and more popular, and GameStop has great cash flow even in this economy. However, they’ve been a bit of a joke on Wall Street, with few investors taking the company seriously. In addition, we could be looking at vast management changes and a review of GameStop’s policies, which would be welcome to many consumers who feel like GameStop takes advantage of their customers with an almost monopoly-like hold on the gaming market.

GameStop’s quarterly report is due out tomorrow, March 18.

Photo Credit: BrokenSphere