PITTSBURGH, May 21, 2020 /PRNewswire/ -- Hestia Capital
Partners LP, Permit Capital Enterprise Fund, L.P. and their
affiliates (the "Investor Group"), who beneficially own
approximately 7.2% of the outstanding common stock of GameStop
Corp. ("GameStop" or the "Company") (NYSE: GME), today sent a
letter to its fellow stockholders setting the record straight on
the Company's poor track record of capital allocation. The
letter details how seven of the current Board members caused the
Company to issue $825 million of debt
from fiscal years 2012 to 2016, largely to undertake a $1.3 billion share repurchase at an average price
of $29.86 per share, while six of
these same Board members sold approximately $35.8 million of their own stock at an average
price of $47.93 per share during this
time. These actions are directly responsible for the
$420 million of senior notes that the
Company has coming due in March 2021. This, along with other
missteps by the Board, contradicts the Board's claim that they have
strengthened the Company's balance sheet through a prudent and
balanced capital allocation strategy.
![](https://mma.prnewswire.com/media/1171753/GME_Letter_5_20_20.pdf?p=pdfthumbnail)
While the current situation may seem dire to some, the Investor
Group details in their letter that they believe the election of
their two nominees will help the Company recover from the prior
Board's levering up of the Company, and help ensure a brighter
future for all of GameStop's stakeholders. The Investor Group
outlines the choice for stockholders: to re-elect two long tenured
directors with largely irrelevant skillsets, no meaningful
ownership and a track record of destroying over $2.5 billion in stockholder value over the past
five fiscal years vs. the Investor Group's strong candidates who
will bring not only turnaround experience and a stockholder
perspective, but also extensive capital market expertise, which is
desperately needed as the Company attempts to refinance this debt
and regain credibility with investors.
The full text of the letter can be found here:
https://mma.prnewswire.com/media/1171753/GME_Letter_5_20_20.pdf
Also, the Investor Group has issued a detailed presentation
titled "More Change Is Needed", which can be found here:
www.RestoreGameStop.com/presentation. In this presentation, the
Investor Group outlines why the recent Board and management changes
at the Company have not gone far enough and further details the
highly relevant and needed skillsets and interests of their two
nominees, which will be critical in helping restore value at the
Company.
Furthermore, the Investor Group encourages its fellow
stockholders to read its proxy materials and stockholder letters,
which are accessible at www.RestoreGameStop.com.
The Investor Group urges stockholders to support its call for
change at the Company by voting the WHITE proxy to elect its
slate of two experienced nominees, Paul J.
Evans and Kurtis J. Wolf, at
the 2020 Annual Meeting.
If you have any questions about how to vote, the Investor
Group's proxy solicitor Saratoga Proxy Consulting can be reached at
info@saratogaproxy.com or (888) 368-0379.
About Hestia Capital
Hestia Capital is a long term focused, deep value investment
firm that typically makes long-term investments in a narrow
selection of companies facing company-specific, and/or industry,
disruptions. Hestia seeks to leverage its General Partner's
expertise in competitive strategy and capital markets to identify
attractive situations within this universe of disrupted companies.
These companies are often misunderstood by the general investing
community and provide the 'price dislocations' which allows Hestia
to identify, and invest in, highly attractive risk/reward
investment opportunities.
About Permit Capital Enterprise Fund
The Permit Capital Enterprise Fund, through its management
company, follows an investing philosophy that seeks to identify
securities trading at a discount to intrinsic value. The investment
approach is bottom-up and focused on the valuation of the
securities of individual issuers. The management company's
assessment of intrinsic value is based on its own fundamental
research as well as numerous sources of publicly available
information.
Contacts:
Kurt Wolf at 724-687-7842
John Broderick at 610-941-5025
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SOURCE Hestia Capital Management, LLC & Permit Capital
Enterprise Fund, L.P.