GameStop Corp. (NYSE: GME) shares jumped early on Monday after the video game retailer announced its intention to launch a modified Dutch auction tender offer.
Essentially GameStop wants to purchase up to 12 million shares of common stock at a price of not greater than $6.00 and not less than $5.20 per share. The tender offer is expected to commence tomorrow, June 11.
This all comes after GameStop had a very disappointing first quarter. In fact, the stock is down about 60% year to date. In the past 52 weeks, the stock is down 65%.
George Sherman, GameStop’s CEO commented on the buyback:
While improving our operations and capturing efficiencies in our business to drive returns for our shareholders continues to be the top priority for the new leadership team, we view the purchase of our shares to be financially compelling at this time. We are committed to leveraging the core strengths of our business, implementing longer-term growth initiatives and continuing our disciplined approach to capital allocation.
Shares of GameStop were last seen up about 7% at $5.35, in a 52-week range of $4.71 to $17.27. The consensus price target is $10.09.