GameStop's stock set to gain after shareholders urge $700 million tender for shares, new board members
Shares of GameStop Corp. were indicated up nearly 1% in premaket trade Thursday, after shareholders Hestia Capital Partners L.P. and Permit Capital Enterprise Fund L.P. urged the video games retailer to tender up to $700 million worth of its stock and bring in new board members. Based on Wednesday's stock closing price of $11.20, the proposed tender amount would represent about 61% of the shares outstanding. Hestia and Permit, which combined own 1.3% of GameStop shares outstanding, sent a letter to the company's board sharing concerns regarding the "dramatic underperformance" of the stock. They said they believe a fair value of the company is "at least" $19 per share, which is 70% above Wednesday's closing price. The shareholders urged the company to return a significant portion of its cash, which they estimate to be about $1.5 billion as of the end of fiscal 2018, to shareholders. The stock has tumbled 27.6% over the past 12 months, while the SPDR S&P Retail ETF has gained 1.0% and the S&P 500 has tacked on 2.2%. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.