GameStop surges after announcing it's selling its AT&T Wireless stores for $700 million

MI
  • GameStop announced Wednesday that it will sell its Spring Mobile business, which owns and operates 1,289 AT&T wireless stores, for $US700 million.
  • In September, the company reported second-quarter results that beat on revenue but missed on earnings.
  • It’s set to report third-quarter financial results after the market closes on November 29.
  • Watch GameStop trade live.

GameStop shares surged as much as 18% on Wednesday after the company said it had agreed to sell its Spring Mobile business.

In a statement, the company said it was selling the division, which owns and operates 1,289 AT&T wireless stores, to Prime Communications for $US700 million.

GameStop shares were halted before the announcement and touched an intraday high of $US14.49 when trading resumed. The 18% gain was the most in over 13 years according to Bloomberg data.

The transaction is expected to close in the fourth quarter of fiscal 2018, and proceeds from the sale will be used to lower outstanding debt, fund share repurchases, and reinvest in the core video-game and collectibles businesses, GameStop said.

“This transaction enables GameStop to enhance our performance with an increased focus on the video game industry and the rapidly-growing collectibles space,” said executive chairman Dan DeMatteo in the press release.

“These are areas where we have considerable experience and where we are well positioned to capitalise on our competitive position.”

In September, the company reported second-quarter results that beat on revenue but missed on earnings. It’s set to report third-quarter financial results after the market closes on November 29.

GameStop is down 26% this year.

Now read:

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.