26% of GAME Shares Bought Up By Sports Direct

Game said Sports Direct had bought 44 million shares

Sports Direct, controlled by controversial, binge-drinking billionaire Mike Ashley, has agreed to acquire over a quarter of GAME Digital, the high street gaming chain.

Sports Direct already owns a stake in other retailers, such as Debenhams and French Connection.

Only last month the company had to issue a profit warning, which it blamed on not having enough stock of the Nintendo Switch to sell.

Business as usual for Sports Direct, and perhaps the implementation of a decidedly questionable working environment in GAME's online and high-street stores throughout the country. Sky News first reported the stake on Wednesday evening.

Given it's current predicament, GAME says it's pleased its "strategic value" has been recognised by Sports Direct. Earlier this morning, Sports Direct bought the shares at 19.75p and the news has upped the share price to a peak of 28p.

Retail analyst Nick Bubb says in his morning email on Thursday: "The best that can be said about the latest weird investment by Sports Direct is that the stake in Game Digital only cost the company about £10 million, such is the low level to which the Game share price has sunk".

As well as offering sporting goods, Sports Direct also has a now-famous range of very big mugs.

The company has a market value of just £33.74m following a slump in the shares amid continued trading difficulties, including the recent profit warning.

Will this latest news herald a positive change for GAME? Adam Tomlinson, analyst at Liberum, said: "We see a number of reasons how Game and Sports Direct can gain from a closer working relationship but it is surely the similar customer demographics that must be the key draw card here".

"The strategic play is not likely to have any concern with reference to the console cycle but rather growth in e-sports, Insomnia events and in-store gaming".

Related News: