Ahead of the Bell: GameStop
GameStop shares tumble in premarket on Wal-Mart plans to expand trade-in program
NEW YORK (AP) -- GameStop shares tumbled before Tuesday's opening bell on news that Wal-Mart plans to expand its video game trade-in program to its stores.
The world's largest retailer plans to let video game owners trade in used video games online and in Wal-Mart and Sam's Club stores for store credit but not cash. Previously they offered trade-ins on a more limited basis online.
It will also offer refurbished used games in its stores for the first time.
The move could take business away from GameStop, which draws a significant amount of its revenue from used-game sales. Amazon, Target, Best Buy, and others also offer video game trade-in programs that offer store credit or cash for video games.
GameStop's business model also remains under threat that video games will ultimately shift to the cloud, eliminating the need for resale services.
In premarket trading, GameStop Corp. shares fell $1.90, or 4.8 percent, to $37.85 about an hour before the market open. The shares have been volatile on recent days, rising about 5 percent on Friday on news that industry wide video game sales rebounded in February.
