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GameStop Corp. Message Board

  • mattem mattem Mar 24, 2011 9:31 AM Flag

    Let's see how long this lasts

    Based on prior experience with GME, I'm guessing not long...

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    • I haven't been posting on this board for a while, but previously I was of the opinion, and still am, that the P/E would stay permanently low due to business model concerns, thus keeping the share price range bound. Any major rally will be sold into by long term investors getting out, IMO.

      Management has done well, though I question their choice to grant themselves shares a while back which came with a $20/share cash bonus. In other words, if the share price goes nowhere or goes south, they still get rewarded.

      "What would cause you to rethink your position?"

      My position is it's a trading vehicle, nothing more. Take advantage of the volatility on both sides. If you're long, sell OTM calls until it's taken from you, and you'll probably get another chance to buy in lower again anyway.

      "People have been predicting the death of this stock for a couple of years."

      2 years, GME -22%, S&P500 +60%. That is the real story, continued under-performance, and I see no reason to think GME can sustainably outperform the market in the future.

    • Gap opening will be closed later today.

      The stock is dead.

      Only one way to go...down, folks.

      Disappointing numbers. Propping up earnings buy share buybacks...even little kids understand that.

    • On the conference call Rob Lloyd stated that they have bought back 29 million shares in total since the start of all buybacks. 164 - 29 is 135 million outstanding shares.

    • I am certainly not adverse to locking in some gains on this -did so in early January and may do so again soon since I am a little overweight in this stock right now.

      However, I am curious when you question the business model. They are effectively halting store growth (decrease in capital spending on stores), growing digital business and have actually increased bottom line earnings and market share. They have bought back stock and reduced debt. Management looks like they have done a great job. People have been predicting the death of this stock for a couple of years. What would cause you to rethink your position?

    • Share count from Balance Sheet is 146m issued and outstanding. A decline of 8% from last year so if EPS grew at nearly 20% it wouldn't be accurate to say that the majority of the growth in EPS came from a reduced share base.
      For what it's worth BV grew 15% to roghly $19.80.

    • Cash down from $905M to $710M, and nearly all the eps growth is coming from share buybacks, bought with cash. Digital sales up, but old business model still 97% of revenue.

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