I'll be doing Dividend Reinvestment with this stock for years to come.
Which means that during the week of the Dividend Payout, longs get paid dividend money they use to buy up more shares.... Over time the dividend payouts grow based on share count and the strength on the LONG SIDE grows with it.
Could see some short term share price jumps during these weeks, possibly.
The dividend is just ok. It's not big enough to scare off shorts and too small to bring in people in search of dividends. I think the main problem is perception. The same perception that has been kicking around for some time. GME going the way of Blockbuster. Sure they are making plenty of digital efforts and it sure sounds like the next consoles will be similar to current, in that they won't be DLC only. But that day will arrive sooner or later and that keeps LT investors away and brings in traders. I myself trade options here and buy puts when it gets around 25 and calls around 20. It's been pretty reliable and I just don't think there's a lot of LT growth here. JMO and no position at the moment.
GME has been in a real tight range over the last two weeks and Friday broke to the downside. The trend over the last several years has been down pre earnings announcement. On a more macro level, GME is a consumer discretionary and with the price of oil going up people will have less money. If oil keeps going up the whole market will pull back.
Dividend: I am in favor of the dividend it was a good move, it opens GME up to another class of investors and encourages more of a buy and hold mentality. That being said the dividend was small enough to allow GME to grow. I do not think there will be any growth from new store openings, I expect them to be flat to -1%. The growth will come from acquisition like Spawn labs and Impulse. I would like to see them acquire Steam or become more of a social or casual game publisher. They need to continue to grow digitally or the stock will continue to be shorted.
Price Catalysts: Obviously, a good earnings report in March. Analysts have all expected the PS Vita to do horribly and the reviews have been great with the only negative being the price tag. The WSJ even says its better than the iphone: http://blogs.wsj.com/speakeasy/2012/02/24/is-the-playstation-vita-really-better-than-an-iphone/
So if they can say at earnings positive things about the vita. E3 in June will be another catalyst from June through December you will start seeing the hype machine for the Wii U. Xbox 720 release announcement which I would expect between May to September to try to steal some of the wii u’s thunder. And also obviously any acquisitions or stock buy backs.
Earnings announcement will come at the end of this week or beginning of next. I would bet Tuesday March 6.
Homer, what is your opinion as to why the price is dropping in the wake of the dividend announcement. I can't imagine that investors would be selling down here with the dividend sweetening the pot. It has to be short selling, right? Why short a company that is trading barely above it's book value, has plenty of cash, and a P/E ratio of 8? Am I missing something?
Basically, any long owner of stock will always get paid. When you short stock, it is borrowed from a brokerage who is lending out its clients shares. The short pays the brokerage and the brokerage pays its clients who are long the stock.
What kind of crap are you smoking? People short dont pay dividends any more than options long do. The only ones that pay dividends is the corporation and the only one that received it is who ever is is holding the stock thru the X-dividend date. You can sell you stock today and will get it.
People short absolutlely pay dividends as they actually borrowed someone's shares to sell into the market. When the dividend is paid, or the stock goes ex div, the short seller owes that to the person or brokerage that they borrowed the shares from. Options don't have to pay because they are derivatives on the equity and not actual shares unless or until exercised.