GameStop director sells $60m in shares
Analyst points to transaction as 'negative sign' for the US retailer
GameStop director Leonard Riggio has sold 2.3 million shares in the US retailer in a transaction that brought in just over USD 60 million last week.
The move saw him cash in the shares at a value of USD 26.72 each, although Riggio still holds a 5.5 per cent stake in the retailer, equating to about 9.1 million shares.
No specific reason for the transaction was given, although one analyst - Alex Romayev from Form4Oracle - believes the move is a negative sign for GameStop, reports Barron's.
He noted that it looked as if Riggio lacked confidence in the company's stock, "unless he desperately needs USD 60 million. He's got a lot bigger stake in Barnes & Noble. Clearly he thinks selling GameStop is better than selling Barnes & Noble."
Barnes & Noble, of which Riggio is chairman, formerly owned GameStop before it was split out as a business five years ago - but Wedbush Morgan's Michael Pachter still thinks the retail chain is well-positioned.
"We believe that GameStop's current valuation is compelling, and we expect the company to benefit from several near-term catalysts, including hardware price cuts, a much improved software release slate, and much easier industry sales comparisons," he said recently in a not to investors. "We expect industry sales to return to positive territory in September, and think that GameStop is well positioned to recover as well."
But specifically on the Riggio transaction, he was at a loss for an explanation: "The only thing I can tell you is that he probably had something better to do with the money," he said. "I feel sorry for these guys who can't live on anything less than USD 20 million."
GameStop shares closed down a fraction yesterday, dropping 0.4 per cent to USD 26.86, while after hours trading saw a further fall of just under 1 per cent.
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