Troubled European and Australian retailer GAME has seen its shares plummet after rumors that the company only has two weeks to sell, pay creditors or shut up shop.
The Times claims that financial services group Rothschild has been tasked with finding a buyer for GAME, as well as reinforcing a popular rumor that the company has two weeks to turn things around. Shares fell sharply to a record low of 0.5 pence – after being 61.5p a year ago – but rose slightly to 1.19p (called a ‘dead cat bounce’) as some investors snapped up the cut-price shares on the hope that they can still make money off the assets or from a sale.
Last week, seven members of the company’s executive team bought 174,995 shares at 5.35p to raise investor confidence. The £936,223 they spent on shares is now worth £272,992.
Ian Shepherd, CEO of GAME, said on Twitter:
Very tough time for all our teams around the world. We fight on, though. Plenty still to do, customer support humbling as ever.
But Mark Photiades of Singer Capital Markets told the BBC that a potential buyer would likely wait until GAME was in administration:
We suspect that any potential suitor would prefer to wait for a formal administration process. Through a pre-pack, the suitor would have much greater flexibility around store liabilities.
Be sure to stick to PSLS as the rumored two week deadline draws ever nearer.