GameStop (GME) - Get GameStop Corp. Class A Report shares were rising 5.7% in trading Monday to $5.30 after the videogame retailer announced that it intends to buy back up to 12 million shares of Class A stock via a "Dutch auction."
The auction price will be regimented at a price not greater than $6 and not lower than $5.20 per share. GameStop shares closed Friday's session down 2.14% to $5.02.
"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," said CEO George Sherman.
The Dutch auction will give the beleaguered company a shot in the arm after a rough week following first-quarter earnings that fell 75% as sales tumbled 12% year over year.
The company then halted its quarterly dividend, a move it said could save it $160 million this year.