Regular readers of the Amateur Investor will know that I have purchased quite a few blocks of Game Group (GMG) shares.
The computer games retailer has been having a torrid time, mainly due to the gamers switching to online retailers for their computer games fix.
Game Group shares were suspended on 21st March 2012, and it was only a matter of time before the Administrators were brought in.
Well is has been announced today that, indeed, the Administrators have been called in.
On High Streets around the country, Game shops have already been closed, in what is probably the biggest retail failure since Woolworths collapsed in 2008.
The following statement has been released:
“Further to our announcements of 21 March, the Board of GAME has completed its discussions with lenders and third parties without resolution, and has therefore today appointed PWC LLP to act as administrators for the Group. This decision is taken after careful consideration and ceaseless interrogation of every possible alternative. The Board would like to thank the teams of GAME and Gamestation colleagues around the world for their exemplary dedication, passion and professionalism.”
From a personal point of view, it’s sad to see another shop chain close, at least for the time being. Perhaps the shops that are still trading might be taken over and a phoenix will rise from the ashes, but I cannot see the switch to online purchasing of games being reversed.
So it looks like my Game Group shares are now worthless. I picked up a dividend of 1.88p per share at the end of 2011 and I hoped that the shares would recover to give me some nice capital growth too. But the shares have been on the slide for a very long time (in April 2010 Game Group shares briefly broke through the 100p barrier. Shares were suspended at 2.39p).
The old saying “don’t try to catch a falling knife” was invented for scenarios just like this!