GameStop Corp. (NYSE: GME) stock rose 11.64% on November 21st, 2018 after the company entered into a definitive agreement to sell its Spring Mobile business, which owns and operates 1,289 AT&T wireless stores, to Prime Communications, L.P. for $700 million, excluding transaction fees and subject to customary working capital and indebtedness adjustments. The transaction is expected to close in the fourth quarter of fiscal 2018, subject to customary regulatory approvals and closing conditions. Proceeds from the sale may be used to reduce the company’s outstanding debt, fund share repurchases, reinvest in core video game and collectibles businesses to drive growth, or some combination of these options. Perella Weinberg Partners LP is acting as financial advisor and Pepper Hamilton LLP is acting as legal counsel to GameStop in relation to the sale of Spring Mobile. J.P. Morgan Securities LLC and SunTrust Robinson Humphrey, Inc. are acting as financial advisors and Gibson, Dunn & Crutcher LLP is acting as legal counsel to Prime Communications.
GameStop’s board of directors, together with outside financial advisors, is undertaking a comprehensive review of a wide range of strategic and financial alternatives to enhance shareholder value. In connection with its review, GameStop’s board determined that the sale of Spring Mobile is in the best interest of the company and its shareholders, as the transaction generates immediate cash proceeds and enables the company to increase its focus on serving its customers’ entertainment needs across video games and collectibles.
On the other hand, GameStop Corp. has selected Right Media Solutions to upgrade its digital video network to more than 3,800 locations. The network will be powered by Commercial Chromebox media players. This network will deliver advertising, interview, game previews and other content on HD displays in GameStop stores as part of GameStop TV. Right Media Solutions previously deployed Chromebox media players at 25 Gamestop locations as part of a pilot and a sub rollout to 300 locations. The Chromebox media players also offer HTML5 content integration for digital signage.
Moreover, InComm, an Atlanta-based prepaid product and payments technology firm, has partnered with Xsolla to develop a solution for gamers paying with cash through its VanillaDirect Pay platform, according to a company release. Under the agreement, customers of video game retailer GameStop, which has 3,800 locations nationwide, will be able to use the cash payment platform to let Xsolla customers load their gaming accounts with cash. Gamers will, therefore, be able to load accounts and buy subscriptions with cash, and not require a credit or debit card. According to Xsolla, about 52 percent of their customers prefer loading with cash.