Yahoo Key Statistics Total Cash Balance Sheet: $442.6m. Wedbush analyst Michael Pachter forecasts that the company will end the fiscal year (April 2011-May 2012) with over $680 million in cash, which it could use to repurchase shares.
Some where in between lies the truth. So lets take a conservative approach and say GME has $600m in cash to work with. Now I’m not gonna go greedy share holder put $100m on the side, GME has $500m to work with.
You want growth through acquisition, GME has the cash. You want higher dividend yield, GME has the cash. You want share buy backs, GME has the cash.
Using $500 million and current shares outstanding 136.42m
Dividend per share: $3.67 Share buy back @ $24 share (conservative again):20,833,333 shares= 15% of outstanding shares
Growth, dividend, buy backs anyway you slice it it puts money in my pocket.
Track Record: GameStop, as a company, since January of 2010 has given back to shareholders about $1.1 billion in stock and debt buybacks. They have expanded digitally too.
Wow. Larger market share? You are entitled to your opinion, but I certainly disagree with larger market share, and as I said, if or when the digital shift arrives, hardware does not deliver margins.
And debt buybacks? LT positive, but ST they are not paying the shareholders. They are using cash to pay the lenders back. And one last thing, if they were to pay a one time special dividend of $3.67, you do realize the share price would most likely immediately drop to reflect that amount coming out of the company.
The powerup rewards is working, how else do you explain 9.9% growth vs negative 4% drop in NPD. BBY also reported weaker holiday video game sales.
“Chief Executive Paul Raines said in an interview that the company's own data indicated GameStop has managed to win market share from "big box" rivals like Best Buy Inc during the holiday period. He said the company was helped by its loyalty reward program. "It meant they were turning left to come to GameStop rather than turning right to go to a big box. Best Buy also posted weak holiday games sales last week.” Source: http://www.reuters.com/article/2012/01/09/us-gamestop-holidaysales-idUSTRE80810O20120109
Homer you know the game industry well and I see you on the other boards. What did ATVI call the next “billion dollar franchise”? Skylanders. With NFC chips in the Wii U you could make any toy a video game but you wouldn’t need that Skylander platform thing.
I agree 100% with the hardware profit margin. However, the industry looks like crap because hardware is falling off the cliff, while software sales increase. Hardware sales boost revenue and in return boost software. People have stopped buying the wii because the wii u is coming. NPD reports in turn look better and perception of the industry changes. Because perception has become reality with stock. The Video game industry is cyclical, software is micro and hardware is macro. We are at the trough of a macro cycle.