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GameStop Corp. Message Board

  • Asianbanker Asianbanker Dec 19, 2002 8:01 PM Flag

    Cautious Buy / Hold

    I would buy this stock only if you were a long-term investor -- short-term plays are too dangerous... Q4 earnings may end up being worse than today's guidance if the consumer cotinues to hold back holiday spending. If you already own it and have the guts to ride the waves, then hold.

    There is still a lot of downside pressure and the growth of the stock price will depend on the Company's ability to meet its targets in FY2003. Unsold inventories leftover from 2002 (mainly hardware -- all those unsold XBox and GC units) due to lackluster holiday sales will affect the bottom line in 2003. However, profit and operating margins remain strong. Therefore, I don't expect to see the stock rise too much in the near-term. If it does, then it's just a dead cat bounce.

    I went in at $16 p/s, thinking it was a great deal back then. Now it's down to $9 p/s. Well, I do believe that the stock has strong fundamentals and will bounce back in the long-run (if earnings are on target) -- but probably not back to $16 p/s. I would hedge if the stock recovers to $11 - $13 p/s range in the near-term.

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    • Yeah that's a LONG's frame of mind is to always look at the future. Put yourself in the SHORT's shoes, both of them. Wouldn't you think that shorter will eventually cover? And the other speculators are saying if the shorts will cover, this thing may just do a dead cat bounce thing.

 
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