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GameStop Corp. Message Board

  • josuahtree josuahtree Mar 3, 2010 6:28 PM Flag

    GME Reality check is needed..

    Poor mgt, CEO resigns recently, poor sales, poor economy, poor unemployement numbers, poor business model, poor holiday sales, poor guidance given by GME, poor numbers and forecase by gamer publishers, Wall Mart & Bestbuy competition, poor use of cash for buyback instead of Dividend, pretty much poor everthing... oh yeah insiders selling recently! now tell me what makes you think they are going to beat estimates on earnings and give great guidance????

    NEW 52 week low coming (again)

    Buy order in at $15.01 and others low to average out...

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    • Good post. I think there is some revenue for the game developers in game add-on DLC, like Microsoft DLC service packs their Operating Systems (can't DLC the original operating system software however, so it's always a disc). Microsoft is most always a good software model to emulate. The game developers could do this without making gamers mad if done right. They could also have every used game buyer have to pay for it separately. Otherwise, I don't see the value in DLC, as in being a revenue booster for the game developers at all.

    • Given your assesment, why would you have a buy order in at all? find a company you have some faith in.

    • The basher's working OT!

      BTW, it was the CFO. Clearly you don't own any shares (or would at least know that) but at least do some basic research before trying to bash so hard.

    • Here are 10 GME Positives:

      1. Dirt cheap valuation:
      > 7X last years earnings, maybe 6X forward earnings
      > 3.5 X cashflow
      = DIRT CHEAP!

      2. Dominant Player - Gaining market share.
      > With the exception of December of last year which caters to "gift buyers", GameStop has been gaining SIGNIFICANT market share. Yes, this in spite competition from Wal*Mart, Best Buy, and Amazon.
      > Fully expect GameStop will continue to gain SIGNIFCANT share, as all the way to December industry growth will likely come from "core gamers" who buy more than their fair share from GameStop. Remember last November, GameStop had +15% sales on new games vs. -3% for industry (an 18% swing!)

      3. Software Sales will Expand Again
      > Beginning in March, comps vs. last year will be very easy to beat, so we will like see growth and news flow will turn positive. By the way, some months growth could be quite strong given this year's stronger game roster. Wall Street has an OBSESSION with comps, and when they turn positive stocks tend to rise!
      > Console sales were through the roof in December causing shortages. In fact, these shortages which are very real, are in part responsible for GameStop's lowering Q4 guidance. When manufacturers replenish inventory, pent up demand will lead for console sales to spike both in the Wii and PS3. People buying new consuls also buy new games, which lead to a spike a game sales.

      4. Buyback accretion. Very likely GameStop has bought back a significant amount of stock, perhaps upto 10% of float. This would boost Q4 earnings to record levels perhaps making 2009 another RECORD YEAR for GME. Also, this earnings accretion will continue throughout 2010 and 2011.

      5. By the way, the CEO did not resign, it was the CFO. Though not positive news, not necessarily awful news either. All speculation as to why she left, maybe because she did not fit with the culture of a very "male" oriented company, personality clash, or a great offer from Wal*Mart she could not pass up. Who knows?

      6. Motion Controllers in Q-4. Natal for X-Box + Sony's controller could lead to boost in both console sales and of new innovative software taking advantage of this new tech.

      7. Broad pessimism/Analyst Downgrades. A lot of bad news is priced in already, or we would be trading at 7 times earnings when most stocks are trading at twice that, many with less earning visibility.

      8. Chart Support. Strong chart support at 17 - 17.50 level. Though admittedly, if we go through it, it would not be pretty!

      9. March - April traditionally very strong share performance for GME (20%+ in 2005, 2006, 2007, 2008, 2009)

      10. Several analysts are actually positive on GameStop and see growth in the software business this year and going forward.

      11. Bonus. We have begun to rise, so good luck with your short position Josuahtree. Frankly, you may be right, you never know, but being short GameStop at these levels is a VERY RISKY proposition.

    • I'd have to state that your the most persistent Troll here. Sit on a pencil, Troll.

 
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