no, it is not because of the 'technicals' or because the 'smart money' is driving it down. it's going down because Best Buy just announced that they will start rolling out the used video game buy-in/trade/rent kiosks that they were testing in Canada.
This is being covered by the Wall Street Journal.
You will recall that I told you all that GME was going to continue to go down and that only bad news can happen until August or September at the earliest (and i doubt a drop in prices of consoles will move GME much, maybe a small, short-lived pop).
Best Buy is well managed--these guys aren't stupid, and they aren't going to expand a used game program unless that have reason to believe it will work. this is a direct attack on GME from a strong competitor.
You mean, like,
APPL from 200-80, run? Now 133.
RIMM from 147-35, run? Now 70.
I get your point, but it's not as simple as just looking at the price, considering the impact of all these programs and quants causing things to overshoot past fair value (in either direction).
Then take ANY other example that you want.
If it goes from 100 to 90 - think
If it goes from 100 to 80 - think
If it goes from 100 to 70 - wonder
If it goes from 100 to 60 - wonder
If it goes from 100 to 50 - RUN, unless you think that you know more than EVERYONE else.
Difference though is GM was losing money hand over fist. GME is still growing earnings, so for a short position to profit you have to hope the P/E drops at a faster rate than earnings are growing. With earnings growth still double digits that means P/E has to drop from 6.5 by double digits percentage. Sure it could, but it could easily be a 2010 P/E of 8-10 and nobody would blink at that.
Could you do a copy and paste of the article? Also, if this was such a big deal I think best buy would do some kind of pr around it. Being so hush hush doesn't really make much sense to me.
I'm not an owner of either stock but would like to start a position in GME sometime in the future.
I am long ATVI.
"if this was such a big deal I think best buy would do some kind of pr around it. Being so hush hush doesn't really make much sense to me."
I guess it would be embarrassing to say you're doing a pilot scheme for used games, after doing a pilot scheme for used games four years ago that failed.
It's in the WSJ online. Thanks to Nsthil for posting the whole thing earlier on another board.
Best Buy Co. (BBY), which began testing the sale of used videogames in some of its Canadian stores a year ago, is expanding the effort to the U.S.
The largest U.S. consumer electronics retailer by sales is testing a kiosk-based model in several of its Dallas and Austin, Texas, stores starting this week, Chief Marketing Officer Barry Judge said Tuesday.
The kiosk scans used games to make sure they work, then immediately issues a voucher redeemable for a Best Buy gift card that can be used for anything in the store, Judge said in a posting on his blog.
"We'll also be testing the sale of used games in those stores, and some of the kiosks will even rent games and movies," Judge wrote.
Last year, Best Buy said it would test selling used videogames in Canada as a way of reaching consumers generally and especially those in the 12- to 14-year age range.
Judge and other Best Buy representatives couldn't be reached immediately for comment.
I live in Canada and can assure you that Best Buy's test (Future Shop in Canada) is an absolute joke. They have but a couple of dozen items in the used games sections of their stores and that's it. Nothing's moving. And that's after a full year of testing... That's why Best Buy in the US is actually going to try with kiosks, NOT the way they tested in Canada. Good luck, they'll need it!
It seems to me that today's dip has more to do with the July 21 put options.
I've never purchased a game from Best Buy... As a matter of fact, I really don't go to Best Buy that often. I typically go to Frys because they have everything Best Buy has, plus a whole lot more.
I've purchased games from Frys, Target & Costco (and probably a couple of old ones off Ebay). Not sure how BBY will fair with used game sales...not the quick in/out type place. I don't think Amazon will do too well either because of the whole mailing thing. The WalMart Kiosk might catch on a bit...still remains to be seen.
You have to admit, walking in the GME and trading/buying games is pretty easy. The guys usually know what they're talking about.
"Best Buy is well managed--these guys aren't stupid, and they aren't going to expand a used game program unless that have reason to believe it will work. this is a direct attack on GME from a strong competitor."
Bear in mind that Best Buy already tested this in SEPTEMBER 2005 when they started a previous pilot program!
They tried it in September of 2005 when the videogame market and used game market was much slower than it is today. Coupled with the fact that some of BBY's biggest competitors are now 6 feet under, BBY is in much better position to use its past experience with its more dominant market power to develop a used game business. This, combined with the digital distribution fears are really weighing on GME. I may lower my own buy point target to $15 or $16 instead of $18-19 as I had previously wanted to start a position.