Guys sounds good but won't do heck of alot. Sure less shares outstanding but now also less 300 million in cash. They balance each other out. Small pop from those that don't understand and then back down. Watch and learn.
Advantages of a Stock Buy Back
Lionel, curious as to where you are picking up that info from?
To be honest they are in a tough position. Their fixed costs are so high that any gain in efficiency is going to be really hard fought. I understand what you're saying BUT being a manager of a Gamestop isn't exactly rocket science is it? If you're passionate about games (which almost all the guys that work there are) and have a decent amount of common sense you should be able to run the store with your eyes closed.
Economy is changing not the market, thus sales will be down big time. How many people do you think are standing in line at GameStop or bestbuy waiting to buy a video game like they did prior to xmas? Not many... watch and learn.
Very dumb...I'm shorting any significant rally this year.
Their model is weakening in light of competion and they just ignore it.
By holiday season '10 either the pps will be up and expectations unachievable or pps will be flat / down and they will be toast. It's a no win for them and they don't even realize it.
Yes yes yes thank you. That is all I care. POP UP I am gone! down I buy back so WHAT? hahahahahaha... Get the picture now dude. What going down must come up. Anything up must going down END-OF-THE-STORY! :)
Less shares outstanding = higher share price. Also, 300mm less in cash, not less in revenue.. Big difference. That said, there is also a psychological reason behind every buyback. The company clearly believes the shares are way too cheap and will be worth a lot more in the future or else they woudn't have announced a buyback. That itself is very promising!
Dee is right, it's not just about the buy back, it's also about the fact it could boost earnings per share by 10% alone, and it's a sign mgt says the shares are too cheap!
$300 million is a very big buy, if we all heard a hedge fund just made a $300 million bet into GME some might be more impressed, but this is definetly a big sign of confidence from mgt.
It's also a backstop against any further short attacks on GME and that means more longs will be confident to step in and buy GME.