Insiders have sold some 960K shares in just three months
On June 17tg GME filed an 8K disclosing insiders intent to sell about 1M shares (from memory). Three months later the sales started.
Since insiders started to sell around Sept 24th, they have now sold ~960K shares, virtually all that the 8K stated. Notable among them is DeMatteo who has sold everything he has exercised or ~400K shares. Bartel has sold ~163K shares.
The company is buying back stock at very high levels to prevent dilution with all the insider sales and more importantly to buy earnings as revenues will likely decline over the next 12 to 18 months. As many here have pointed out the online game sales trend is set to accelerate and this will be a long process that will put pressure on GME stock price.
Quarterly reports were rosy up until one quarter ago, management talked a good story and managed expenses to get the shares higher to allow them to exit at multi year highs. Now that most of the insiders have sold, the company announces a quarter were guidance failed to meet the high expectations management had built for this console transition. Coincidence? Sure!
Insiders are now mostly out, it is now just a matter of time before they come out and guide down to reflect the reality that faces the games retailer.
This year "looks good" relative to several years of very poor performance, and is only so because of the new consoles. However, if one compares this XMas to the one 7 and 8 years ago when the old gen released, it pales in comparison.
The competitive environment is and will continue to be tougher for GME, no question about it. This year has been a gift to longs, but with GME at multi year highs it stands to have a long period of sales and share price decline once this momentum wanes, and it will, it is just a matter of time, I give it two quarters max.