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GameStop Corp. Message Board

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  • johnmr12 johnmr12 Aug 20, 2012 7:51 PM Flag

    That sound you hear

    I agree with your assessment of the future of GME, which is why I am invested. But, I don't believe that funds will be buying in large volume until they see actual growth. If GME can reach their year guidance of $3.10 or higher, and if they can raise guidance for the following year, then I think funds will jump in big time. Meanwhile, there are almost 50 million shares short, and I can't see that many shorts covering in a month or two. Retail shorts are probably covering because they don't have the deep pockets like someone like Jim Chanos.

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    • Funds will buy because the 5.5 percent yield for a company with this balance sheet is very attractive to them. There are funds that invest based on yield percentage. Of course, growth is a factor, you are right about that. Remember,the large hedge funds shorting this have to pay the dividend. Thus, a million shares short owes 250,000 in a few weeks, not a large sum, but it has to be accounted for. I think the volume of these past few days will continue as shorts want to get out before the divdend payment is due.

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