Wrong again Beefstu, although i doubt you contemplated a real bearish thesis, but
just guessed, as usual. You were even WRONG on your intra-day call/guess.
At $ 38.40, or $ 2.50 from where you make your guess, GME is 4.1 % from the
$ 40 target mentioned by JK. GME is UP 5.5 % since your first post on Jan 20.
When you are the board "jerk", you get zero slack from the rest of us.
at least he's making a call about where the earnings and the stock may go. What do you do but make personal attacks that aren't constructive?
To shut up the idiots on the board that don't know anything about finance I am posting here the effect of what a $350 million buyback does to the earnings of GAMESTOP.
Here are the facts...
$350 million was borrowed...
5.5% is the interest rate
GamStop will make 375 to 400mm in Net income/Net Profit for 2014
Let's assume the following....
$350 million is used 100% in a buyback...
If this happens at $35 a share 10 million shares will be reduced (given today's prices it is totally possible)...
Shares outstanding goes from 110 to about 100 million
EPS goes from about $3.40 (LOW END) to about $3.75 just on them reducing share count...if the multple for the business is 10x PE then a shareholder also increases their wealth by $3.50 a share ($34 vs. $37.50)....$350mm in marketcap gain
BUT there is more...10 million less shares means $1.32 per share less in dividends paid out...so that is $13.2 million less in dividends paid (which is after the 40% corporate tax rate)....so even though they are paying 5.5% in interest which is about 19.25 million they are only really paying about $6 million or about 1.7% interest a year...pretty good...
Wait...there is MORE!!!!.....the tax benefits is actually great for shareholders...interest is expensed which is about 6 cents more but I think any investor would rather take a .35 cent increase in EPS for a 6 cent "increase" in expenses.....
I wouldn't do 100% buyback...I think they get better returns by opening up more cricket wireless, simply mac's or other operational initiatives.....if it were up to me i would lever the comany to about $1 billion and keep growing tech brands and buy back shares because the company produces about 500 million in cash per year.. and could easily pay off $1billion in debt in two to three years....the business isn't dead and the company has been proving it for years....
Sentiment: Strong Buy
Gamestop has always been a really weird stock on the stock market. You have an epic truck load of people expecting the company to go Bankrupt and shorting the living heck out of it. Sure, the company has lots of issues with Digital Downloading eating into their sales/revenue.
But, it isn't as if Gamestop is sitting on the laurels over the last few years. They have done a lot to boost revenue/sales by branching off into other businesses. Their AT&T stores selling mobile devices is just one example. They have PC Downloads and Kongregate to participate in Digital Downloading revenue.
They haven't been the best at putting together consecutive solid quarterly growth. But, with far more CASH on the balance sheet than DEBT and the New Nintendo 3DS XL boosting hardware sales this quarter (when apparently they were weaker than expected last quarter) it is absurd to see the stock price where it is at.
No company, even with existing troubles, deserves to be trading with a SINGLE DIGITS forward P/E. Gamestop has always been a profitable company and capable of year over year same store sales growth. So single digit P/E? Give me a break!
Gamestop would not be increasing their dividend on top of doing a Share Buyback plan if they seriously were the next RadioShack. They are in fact a company simply in a transitionary period. They aren't Blockbuster where everything they try doesn't work... A lot of what they have done in the past and currently has been working wonders for the Balance Sheet.
Give Gamestop a 15 P/E more than fair....And the share price at $3.49 a share should be $52.
Sentiment: Strong Buy
The volume is down from 4-5 mm daily in Nov-Dec 2014 to 1-2 MM today. Very difficult for shorts to cover. A slow movement upward with low volume is water torture for shorts.
those 163 stores are for spring mobile a subsidiary of gamestop, they sell at&t cell phones.....that is called diversifying their revenue stream
Us longs are up 14% for the year with more momentum on our side. Beefy boy, the real question is how is that short position doing for you?
"Everyone's home ordering things on Steam or at WalMart buying used games."
That doesn't explain the packed GameStops near me.
talking about being rude, both eyes post was extremely rude. In any case, I think its obvious buy backs are good for GME considering the stock is undervalued and has room to grow. No one seems to talk much about the attack on Sony and other companies lately. I am sure it affect people's buying habbits. Many gamers are likely to be anoyed with the down servers and potentialof stealling their personal data and choose physical games. Gamestop isnt going anywhere. See you at all $50 in 2015.
Sentiment: Strong Buy
WDC (Western Digital), i had it awhile back when it was getting plummeted b/c of the theory that SSD would wipe out the need for hard drives. the stock dropped to near its book value (i was shocked), my shares were called away (sold covered calls), & the extreme drop drove me away from the stock, now look where it's @. #$%$ commentators, & speculators!
i hope the same will happen to GME.
according to analyst estimates, GME annual EPS for the coming year is better then this year; yet somehow it's getting bogged down by "going digital" scare.
some people still like going to the stores, touching the games; it's fun!
selling covered calls on your stocks, great way to make $, while you wait for your stock to get back to break-even, which is the case with me.
should run up before earning (in March), another avenue for me to capitalize on. :D