GameStop Corp. (NYSE: GME) (the “Company”) today issued a letter to
stockholders affirming that GameStop possesses a stable,
comprehensively skilled and experienced Board that is successfully
advancing the Company’s innovative business transformation plan,
GameStop Reboot, to enhance long-term value for all stockholders.
The letter notes that Hestia Capital Partners, LP and Permit
Capital Enterprise Fund, LP’s campaign distracts from leadership’s
ability to continue to execute its strategic turnaround plan and
deliver returns to all stockholders. The letter urges stockholders
to use the
BLUE proxy card to vote “
FOR
ALL” of GameStop’s 10 highly qualified director nominees
in connection with the Company’s upcoming Annual Meeting of
Stockholders (the “Annual Meeting”) to be held at 8:00 a.m. CT on
June 12, 2020.
June 1, 2020
Dear GameStop Stockholders,
Our June 12, 2020 Annual Meeting of Stockholders is swiftly
approaching. Instead of choosing to engage constructively,
Hestia Capital Partners, LP and Permit Capital Enterprise Fund, LP
(“Hestia Capital” and “Permit Capital” and collectively, the
“Dissident Stockholders”) continue to attempt to remove two highly
qualified independent directors from your thoughtfully and
comprehensively refreshed Board. GameStop’s Board believes that the
Dissident Stockholders’ efforts to remove these directors seriously
jeopardize our ability to continue successfully executing the
Company’s innovative business turnaround plan, GameStop Reboot,
which is being implemented to enhance long-term value for
ALL stockholders.
We have made multiple attempts this year to avoid a costly proxy
battle with the Dissident Stockholders. Last Friday, your Board
once again attempted to resolve the proxy battle, offering a
generous settlement proposal to the Dissident Stockholders, as
outlined in greater detail below. Our thoughtful offer was
summarily rejected, even though our offer would have provided the
Dissident Stockholders with a “stockholder representative,” which
has been the central theme of their campaign. The Dissident
Stockholders’ refusal to engage with your Board to avoid a proxy
fight suggests they are only motivated by their own self-serving
agenda.
Your Board urges you to protect and support GameStop’s progress
by using the BLUE proxy card to vote “FOR
ALL” of GameStop’s 10 director nominees and discarding any
White proxy card you may receive from the Dissident
Stockholders.
The Right Team is Driving
Results for GameStop’s Stockholders
GameStop possesses a highly qualified, independent Board of
Directors that has been thoroughly refreshed within the last two
years. Since 2018, GameStop has added six new independent
directors, including two directors added under a cooperation
agreement with the Dissident Stockholders. The refreshed Board
thoughtfully recruited a new executive leadership team in 2019 –
including Chief Executive Officer, George Sherman – that has guided
successful retail business transformations and is capable of
leading GameStop’s turnaround and enhancing long-term value for
ALL stockholders.
GameStop’s recent and comprehensive refreshment of its
Board and management team is already driving the Company’s upward
trajectory.i
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/d470c6cb-6c86-48f0-928b-248f2ccb958c
Together, GameStop’s refreshed Board and management team have
paired our longer-tenured directors’ institutional knowledge with
our new directors’ and executives’ fresh perspectives to create,
implement and execute a carefully considered strategic plan that is
delivering quantifiable results. The market’s judgment of
this refreshed Board and management team and its innovative
plan is clear: since we announced “GameStop Reboot,” our
Total Shareholder Return (TSR) has outperformed both our proxy peer
group and the Russell 2000 index.
Implementing GameStop Reboot has further strengthened the
Company; initial execution of the plan has established a prudent
capital allocation strategy, reinforced the Company’s balance
sheet, optimized operations by improving inventory, reduced debt,
and generated increased financial flexibility. Due to the refreshed
Board and management’s prudent foresight, GameStop has proven
well-positioned to withstand the market pressures arising from the
COVID-19 pandemic and continue to protect stockholder value.
In contrast, the Dissident Stockholders’ director nominees
simply do not possess the requisite skillsets or substantial
relevant experience to operate a global public company like
GameStop, let alone help the Board continue to advance the
Company’s business transformation plan. |
- Messrs. Kurtis Wolf and Paul Evans possess extremely limited
public company experience and no large multi-national company
experience
- Messrs. Wolf and Evans possess no retail experience, video game
experience, or omni-channel experience
- Careers in treasury or portfolio management do not add value to
a Board that already has directors with strong financial and
operational experience, in addition to the retail, video game,
omni-channel, and public company management and board experience
that Messrs. Wolf and Evans lack
Despite the clear disparity in qualifications
between the Dissident Stockholders’ nominees and the directors
nominated by your Board, we have made significant efforts to reach
a reasonable resolution and save stockholders the distraction and
cost of an unnecessary proxy fight. As recently as last Friday, we
made another settlement offer to the Dissident Stockholders,
offering to appoint either Paul Evans or Permit Capital’s founder,
John Broderick, to join your Board and to reimburse the Dissident
Stockholders for reasonable expenses incurred in the course of
their approach. However, the Dissident Stockholders rejected this
most recent generous offer that would have placed the “stockholder
representative” that they believe is needed on your Board,
apparently preferring to seek disproportionate influence over your
Board in a self-serving campaign rather than engage constructively
for the benefit of ALL stockholders. It is clear
that the Dissident Stockholders do not actually want a stockholder
representative on your Board—they only care about adding Hestia
Capital’s founder, Kurtis Wolf, to your Board so that he can reward
himself at the cost of all of GameStop’s other stockholders.
Stockholders should question the Dissident
Stockholders’ ultimate motivations. The combination of their
self-serving, misguided and reckless capital allocation demands as
well as their refusal to consider reasonable settlement offers
demonstrate that they do not understand GameStop’s business and
operations, and that they do not prioritize the interests of all
stockholders above their own. Your Board, in contrast, is driven by
our commitment to represent the interests of ALL
stockholders. Your Board has provided direct oversight of GameStop
Reboot, improving the Company’s performance for the benefit of all
stockholders, and refreshed both your Board and management team
pursuant to direct stockholder feedback, in order to implement an
effective and progressive business transformation plan.
GameStop’s thoroughly refreshed and highly qualified Board
sincerely believes that the continued execution of GameStop Reboot
by the Company’s new management team under the experienced Board’s
guidance will build upon the progressive change that it is already
delivering, and transform the Company to drive substantial,
long-term value for ALL stockholders.
The Choice is Clear- Please
VOTE on the BLUE Proxy Card
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU
VOTE “FOR ALL” OF YOUR BOARD’S 10 NOMINEES USING THE ENCLOSED BLUE
PROXY CARD.
Vote your shares FOR ALL of the 10 director
nominees proposed by your Board, via the Internet or telephone or
by mail by promptly marking, signing and dating the enclosed
BLUE proxy card and returning it in the enclosed
postage-paid envelope.
Please discard and do not vote any White proxy card sent to you
by the Dissident Stockholders. If you have already voted
using a White proxy card sent to you by the Dissident Stockholders,
you can revoke it by voting the BLUE proxy card as
described above via Internet, telephone or by mail.
No matter how many shares you own, your vote is extremely
important. Please act today and make your voice heard
regarding the future of the Company by supporting your Board and
management team.
We believe that GameStop’s highly qualified and experienced
Board of Directors is best-positioned to oversee the continued
successful execution of GameStop’s Reboot plan and deliver
substantial value to ALL of our stockholders. On
behalf of the Board of Directors and our management team, thank you
for your continued support and your investment in GameStop.
Sincerely,
GameStop Corporation
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Such statements are based upon management’s current beliefs,
views, estimates and expectations, including as to the Company’s
industry, business strategy, goals and expectations concerning its
market position, future operations, margins, profitability, capital
expenditures, liquidity and capital resources and other financial
and operating information, including expectations as to future
operating profit improvement. Such statements include without
limitation those about the Company’s expectations for fiscal 2020,
future financial and operating results, projections, expectations
and other statements that are not historical facts. All statements
regarding targeted and expected benefits of our transformation, the
GameStop Reboot plan, capital allocation, profit improvement and
cost-savings initiatives, and expected fiscal 2020 results, are
forward-looking statements. Forward-looking statements are
subject to significant risks and uncertainties and actual
developments, business decisions and results may differ materially
from those reflected or described in the forward-looking
statements. The following factors, among others, could cause
actual results to differ materially from those reflected or
described in the forward-looking statements: the uncertain impact,
effects and results of pursuit of operating, strategic, financial
and structural initiatives, including the GameStop Reboot strategic
plan; volatility in capital and credit markets, including changes
that reduce availability, and increase costs, of capital and
credit; the impact of the COVID-19 outbreak on capital markets and
our business; our inability to obtain sufficient quantities of
product to meet consumer demand, including due to supply chain
disruptions on account of trade restrictions, political
instability, COVID-19, labor disturbances and product recalls; the
timing of release and consumer demand for new and pre-owned
products; our ability to continue to expand, and successfully open
and operate new stores for our collectibles business; risks
associated with achievement of anticipated financial and operating
results from acquisitions; our ability to sustain and grow our
console digital video game sales; our ability to establish and
profitably maintain the appropriate mix of digital and physical
presence in the markets we serve; our ability to assess and
implement technologies in support of our omnichannel capabilities;
the impact of goodwill and intangible asset impairments; cost
reduction initiatives, including store closing costs; risks related
to changes in, and our continued retention of, executives and other
key personnel and our ability to attract and retain qualified
employees in all areas of the organization; changes in consumer
preferences and economic conditions; increased operating costs,
including wages; disruptions to our information technology systems
including but not limited to security breaches of systems
protecting consumer and employee information or other types of
cybercrimes or cybersecurity attacks; risks associated with
international operations; increased competition and changing
technology in the video game industry; changes in domestic or
foreign laws and regulations that reduce consumer demand for, or
increase prices of, our products or otherwise adversely affect our
business; our effective tax rate and the factors affecting our
effective tax rate, including changes in international, federal or
state tax, trade and other laws and regulations; the costs and
outcomes of legal proceedings and tax audits; our use of proceeds
from the sale of our Spring Mobile business; and unexpected changes
in the assumptions underlying our outlook for fiscal 2020.
Additional factors that could cause our results to differ
materially from those reflected or described in the forward-looking
statements can be found in GameStop's Annual Report on Form 10-K
for the fiscal year ended February 1, 2020 (the “10-K”) filed with
the SEC and available at the SEC's Internet site at
http://www.sec.gov or http://investor.GameStop.com. Forward-looking
statements contained in this press release speak only as of the
date of this release. The Company undertakes no obligation to
publicly update any forward-looking statement, whether as a result
of new information, future developments or otherwise, except as may
be required by any applicable securities laws.
Additional Information
On April 28, 2020, the Company filed a definitive proxy
statement on Schedule 14A and form of
associated BLUE proxy card with the SEC
in connection with its solicitation of proxies for its 2020 Annual
Meeting of Stockholders (the “Annual Meeting”). The definitive
proxy statement is also being mailed to the Company’s stockholders
beginning on or about April 28, 2020. INVESTORS
AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THE
DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS
THERETO) AND ACCOMPANYING BLUE PROXY CARD AS THEY CONTAIN IMPORTANT
INFORMATION. Investors and security
holders may obtain free copies of the proxy statement (including
any amendments or supplements thereto) and other documents filed
with the SEC through the website maintained by the SEC
at www.sec.gov. Copies will also be available at no charge in
the “Investor Relations” section of the Company’s
website, http://news.gamestop.com/home.
Participants in the Solicitation
The directors, executive officers and certain other members of
management and employees of the Company may be deemed
“participants” in the solicitation of proxies from stockholders in
connection with the matters to be considered at the Annual Meeting.
Information regarding the persons who may, under the rules of the
SEC, be considered participants in the solicitation of the
Company’s stockholders in connection with the Annual Meeting can be
found in the definitive proxy statement filed on April 28, 2020 and
the 10-K, each of which is available at the SEC's Internet site at
http://www.sec.gov or http://investor.GameStop.com.
Media Contact:Phil Denning, ICR Inc.(646)
677-1258Phil.Denning@icrinc.com
Investor Contact:
GameStop Corp. Investor Relations(817)
424-2001investorrelations@gamestop.com
If you have questions about how to vote your shares or need
additional copies of the proxy materials, please call the firm
assisting us with the solicitation of proxies:INNISFREE
M&A INCORPORATEDStockholders may call:1(877)
750-9501 (toll-free from the U.S. and Canada),
or+1(412) 232-3651 (from other
countries)IMPORTANT NOTE: Please simply discard any White
proxy cards sent to you by the Dissident Stockholders. If you have
already voted using a White proxy card, you can change your vote by
using the enclosed BLUE proxy card to vote by
telephone, Internet or by mail.Only your latest-dated vote will
count. |
About GameStop
GameStop Corp., a Fortune 500 company headquartered in
Grapevine, Texas, is the world’s largest video game retailer,
operates approximately 5,500 stores across 14 countries, and offers
the best selection of new and pre-owned video gaming consoles,
accessories and video game titles, in both physical and digital
formats. GameStop also offers fans a wide variety of POP!
vinyl figures, collectibles, board games and more. Through
GameStop’s unique buy-sell-trade program, gamers can trade in video
game consoles, games, and accessories, as well as consumer
electronics for cash or in-store credit. The company's
consumer product network also includes www.gamestop.com and Game
Informer® magazine, the world's leading print and digital video
game publication. General information about GameStop Corp. can be
obtained at the Company’s corporate website. Follow @GameStop and
@GameStopCorp on Twitter and find GameStop on Facebook at
www.facebook.com/GameStop.
_____________________________i From Sept. 12, 2019 through May
19, 2020. Peers Include: Abercrombie & Fitch, Bed Bath &
Beyond, Ascena Retail Group, Designer Brands, Nordstrom, Dick’s
Sporting Goods, Signet Jewelers Limited, Michaels Companies, Urban
Outfitters, Gap, Office Depot and Williams-Sonoma
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