Ok I get long winded and typo prone on mobile devices due to the touch screen...
Here's it is in lamens terms:
1) Gamestop's buy back program by itself can produce EPS gains year over year. So an EPS gain year over year shouldn't shock and awe the Wall Street crowd and cause the share price to go higher.
2) To push the share price of Gamestop higher will take a number of positive scenarios:
A) Same Store Sales growth trend shows accelleration.
For this to be the case the consumers have to come back. Right now no one is buying current generation hardware (it is old). No one is buying software (not enough new releases in January/February). Gas prices are high. Unemployment is still bad. etc. etc.
When consumers are strapped for cash, yes, they will look to DIGITAL dnloading their games at much cheaper prices. So digital is a factor.
Gamestop seeks to push digital sales inside their stores and to push Mobile Hardware Sales and Trade-in / Refurbishment programs for devices to boost hardware sales. Therefore helping to alleviate the massive slowdown over the years in both software and hardware sales (which has claimed the victim of Game Group).
B) Gamestop Digital Growth needs to hit the 10% milestone. This means digital sales revenue is 10% of total revenue. A lot of analysts have attacked Gamestop's digital strategy on the grounds that it isn't significant compared to the whole pie.
Once Gamestop's digital shows 10%+ revenue, that argument from the shorts goes away.
And ultimately, we need the MACRO economic outlook to show positive improvements.
Today's story is "SPAIN = DEBT CRISIS" and the latest floating rumor surrounding Gamestop is that they want to acquire Game Group leases in SPAIN / IBERIA region....*gulp*
Well it's calming to know that GME spends a million a year to keep Richard "Tricky Dicky" Fontaine. The International Chairman of the Board, CCEO, Darth Vader etc. Surly, he has his pulse on all things "International" and will steer the company in the right direction on any aquisitions. Or, he can sit on his perch in France (where the ladies wear no underpants) and just pocket the money while doing nothing (which has been the case for far too many years)
gme needs digital sales account to a whole lot more than 10% of revenues for the company to keep stock price up. gme expenses are pretty close to fixed (stores, personnel), but if trends continue the stores will be dropping revenues each year from now on.
the video game industry is in a funk. Kids are spending time online and on mobile phones, not video game consoles. Also, the traditional video game companies are recycling the same old tired game franchises. how many Call of Duty repeats will they play? gme is in the roughest spot because it will not participate in all the digital future for games.
the only question is at what point these issues hit the financials. my guess is very soon.