What were the NPD results? I'm sure they were terrible. GME probably did at least twice as good as the NPD results which I'm sure will speak to their continued market share increase.
Making the EPS probably also had to do with increased exposure to the ipad/phone expansion plans. No only are the margins in line with the rest of their pre-owned strategy but the dollars are huge per transaction. It takes a lot of video game trade ins to equal the profit of selling one refurbed ipad.
Diablo III will be coming out on 5/15 which should prove to be a powerful title for the PC user. If it does anything along the lines of what Everquest did and WoW, it could become a catalyst to sustain topline sales in Q2 and their introduction into the micro-transactions for that game.
I'm glad to see them pre-announce so that the run up and sell off will be more leveled off. I do believe that they will have a strong back end of the year. If they can maintain Q2,the year should pan out well. Like I've said before, think what you will about WII U, and the other gaming formats. Christmas requires gifts under the tree, period. Those gifts have been and will remain being the latest in electronics. WII U will be sold out, hard to find and will have it's space on the news etc. as the "must have" gift.
Don't believe the hype about new systems and not being able to play used etc. Bunch of balony! The industry is too intertwined to alienate a customer, format or retailer. GME (like it or not) is too strong of a voice to be ignored. They've been in talks with hardware makers since 1987. They are easily as powerful in the video game space as Nin, Sony, MS etc.
I remain hopeful for 2012. Buyout or some news to shake the shorts out of the trees would be welcomed!
So let me get this straight: we are trading at 6.4X the top end of their reaffirmed guidance estimate -- 6.4 X $3.30= 21. A PE of 6 and a half, no debt, a dividend which will only grow, share buybacks which will continue to add value, WII U coming out digital expanding at 40 to 50 percent, and new revenue from the Apple products. Why is this not trading at 35? How many more years will the shorts claim this is a dead business with profits reaching $3.00/share and hundreds of millions in cash flow? Next year they will do $4.00 per share, then we can trade at 5X earnings. Ridiculous manipulation going on.
The shorts realize Mgt is committed to the crack house business model. The crack is drying up and folks won't be trading in their Apple products as often as used games. Digtal Business might keep the name around however the bottom line is they need to consolidate to destination stores like Half Price Books.
Reminds me of when Sears had Catalog Stores in every town..
I'll explain why. Read my blog post on why I just sold GME after holding for years. It may save you some money. I was a long bull on GME and held for years. I'm out of the stock as I said and don't hold a position long or short in shares or options.
The shorts were right about the stock but for the wrong reasons it turns out. They got lucky. Read why...
The problem is that when SSS fall 12.5%, the future does not look bright. No company in any industry can continue to make money with a number like that. Eventually it will catch up to them. Granted GME has been unfairly labeled as dead, far too early, but the irony is that it could eventually come true. Again, they could just take themselves private, shrink it down, and coast on piles of money to keep for themselves.