American hedge fund Elliott Management has sold its shares in UK-based gaming retailer Game Digital. The retailer made the announcement today as it confirmed that its non-executive director, James Shinehouse, who represented the hedge fund on Game Digitals board, would also be stepping down.
Following the announcement, shares of the gaming retailer dropped 13 per cent. The share price slump comes after the company pre-tax profit fell 16 per cent in the six months to January this year, although revenue had increased 3.9 per cent.
Game Digital's shares had improved considerably in February, after it announced it was opening e-sports areas in Sports Direct's shops. The retailer also announced that Miton Group would be taking its stake in the company to 13 per cent.
Announcing the departure of Elliott, Game Digitals CEO Martyn Gibbs expressed only gratitude towards the hedge fund: “Elliott has been an engaged investor, and I would like to thank them for their support of Game as we developed the operations and strategy of the business over the last six years,” said Gibbs. “We have devised a strong growth strategy and are now well positioned to drive the transformation of our business, as we move from a seller of physical products to a provider of gaming experiences.”
Separately today, Bloomberg reported that Elliott had taken a stake in UK software firm Micro Focus. In response to the report, shares in the software company spiked 12 per cent, before dropping off slightly to trade up at eight per cent. A spokesperson for Elliott Management declined City A.M.'s request for comment.