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GameStop Corp. Message Board

  • angelfund888 angelfund888 Mar 14, 2002 11:45 PM Flag

    GME Versus ELBO

    I just listened to ELBO's conference call. Encourage others here to do the same. (800) 642-1687, access code: 3360652.

    During the Q&A, Gamestop was mentioned. Jeff Griffiths (ELBO's CEO) refrained from answering one question due to competitive considerations. One analyst questioned their guidance for the current quarter ($.01-.03) which appears agressive. Jeff acknowledged that they anticipate losing market share.

    In my opinion, ELBO's earnings release and subsequent CC validates Gamestop's continued growth and success.

    All the analyst "buy" ratings this week initiated on GME should start generating institutional and retail interests, leading to greater demand for the stock.

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    • Finally, a real gamer, Swing Trader, on this board. Listen up folks, gamers are the key for GME not socker moms or computer geeks. Gamers buy equipment and games based on the recommendations of other gamers. The real players are avid and good at this stuff and they don't suffer fools. If they like our stores, we'll do fine.

    • Vlad:

      I see it differently than you.

      How much inventory do you really think we're talking about? The lousy 400 stores had moderate inventory levels to start with and the valuation of the affected games you're talking about had to be costed at the current average buy back cost. If you mess it and don't disclose up front, you run into accounting irregularities. The real issue here is believing that GME would have been dumb enough to miss such an obvious oversight. Give the CEO and COO a little credit for they have been in the business a number of years.....these guys aren't fools.

      The company is sitting on a big chunk of cash that was generated through the IPO. Any write-off can be justified easily enough, if it's the right thing to do and well explained to the analysts. As an investor, I'm interested the sales growth and will base the multiple, on what I believe to be the future stream of earnings. A one time write-down....unless it was some incredible number. Frankly, I think it is immaterial in the overall scheme of things because of the explosive growth GME we'll see from them.

    • Does anyone want to take the over-under on when GME writes down all the bad inventory they picked up from the Funcoland acquisition? You know they took it at book value, and that the used video game portion of Funco's inventory is significant, and materially over-valued. Their stores are full of 8bit and 16 bit games. Perhapse they should change their SIC code to that of an antiques dealer.

      My over-under is a year. I'll give two to one odds for the over. Inventory write-down, here we come!

      (Disclosure: I am not short this stock (yet, at least))

    • You fail to mention how GME went bankrupt twice in it's past. Did he say they would lose marketshare TO Gamestop, or just in general? BBY & other big boxes are growing quickly and do healthy softwear sales volumes.

      I've seen EB chase GME out of high traffic malls before, ELBO has been and is, better run.

      • 2 Replies to vlad57
      • Try this just one time: go to BBY and shop for Consoles or Games. It's hopeless unless you hit it right. Staff all over the place but none of them play. And, Nintendo 64 is still in the test samples. Something is wrong with this big box retailer when it comes to video games. They may have lost focus due to the good sales of Digital Entertainment TV sets. GameSpot's web page has everything in stock both new and used. Say what you want about the old Babbages, but the store had early PC games that were astounding.

      • And a simple sales to market cap comparison actually has ELBO cheaper than GME, and ELBO is way over-priced. Longs will get hammered once MM support drops out from under GME. No,I'm not short, but I am considering it.

        GME Sales 1.1B, Market Cap 1.1B
        Elbo sales 1.0B, Market Cap 0.9B

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