The Games Retailer Has Been Through Some Turbulent Developments Recently
A hedge fund that owns a significant amount of stock in GameStop recently sent a letter to the board of the games retailer that urged them to change several of its business practices or risk the hedge fund selling off its shares.
In their letter, Tiger Management stated that they viewed “the recent management departures and crisis of confidence” as an opportunity to find ways to improve how GameStop does business.
Earlier this month, a GameStop CEO stepped down from the position after only three months on the job and his predecessor resigned due to health concerns and died in March. Their interim CEO is named Daniel DeMatteo.
“To the extent that you fail to implement a turnaround plan, we merely intend to sell our shares and redeploy capital toward more attractive investment opportunities,” the letter reportedly read.
One of their suggestions was for the retailer to divest from “ancillary businesses that continue to drain valuable resources, specifically Technology Brands, ThinkGeek.com and International segments.”
A GameStop representative confirmed that they had been sent the letter in a statement. “I can confirm that GameStop did receive the letter from Tiger Management, L.L.C.,” the representative said. The representative added that the retailer has “a long track record of welcoming communication from all of its shareholders and values constructive input that may help increase shareholder value.”