GAME has real earnings, not like other companies continue losing money quarter after quarter.. Anal-ists keep nit-pickin' for no reason, this is a growing company and they're building customer base.. continued beat guidance expectations with a large product portfolio in a pipeline to accelerate their future growth.. these anal-ists are a bunch of manipulators..
this quarter's earnings were exagggerated by several one-time items so actually they are not as real as they look like.
Even worse their mobile distribution strategy seems questionable to say the least.
Much worse the life span of mobile games in Southeast Asia seems to be even shorter than expected so far making the much hyped mobile gaming business look like a drag.
But the worst of all is the fact that GAME will be misused for buying out some small subsidiaries of holding company Shanda at a brutal price tag - an intransparent related party transaction seemingly designed to screw outside shareholders which will see the cash rich company they once owned move to a huge net debt position in no time.
As long as this transaction isn't called off the stock will go down.
Most of the above is mentiioned is has some merits, I do not agree that the transaction will cause the stock to keep going down. It has its bottom. This stock would've easily been above $6-7 if not for the buyout bad news. Stock has been hammered after earnings and even with somewhat positive guidance. The selloff was a reaction to the analysts view of the limited distribution method for their mobile game. It's now under $4, so most if not all the selling should've probably been done by now???
As Shanda Interactive holds 80% of GAME shares, and insiders and others hold around 50% of that 20%, the actual float for GAME is rather small. And, as GAME continues their buyback, the float will get even smaller. Once this shakeout has slowed to a trickle, the madness will stop and GAME price will level out and rise with each consecutive quarter.
You are correct. GAME currently makes roughly $1 million in net profit every 36 hours, giving it a forward PE of 4. They've been ahead of the curve in mobile gaming and currently have the largest pipeline in their history. They also own a majority stake in Actoz Soft, one of the most successful gaming companies in Korea. Extremely high reward/risk ratio for this one.