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GameStop Corp. Message Board

  • francozampetti francozampetti Sep 30, 2012 12:36 PM Flag

    Perfect storm is brewing

    The reasons that GME is about to explode in the next 6 months are:

    1. iphone trade ins will not only continue but should surge as Q4 gets rolling. Look for potential upside to the effects that business to the bottom line. Keep in mind that at GME, if you want cash for your trade, you receive less than if it were store credit. That's good for GME since alot of people will want the cash if they plan on upgrading to i5 or samsung whatever.
    2. tablet sales will continue to grow. will probably outpace their conservative estimates.
    3. WiiU presales are sold out. TV commercials haven't even started in mass yet along with the traditional "what's the hottest toy" pieces they'll run on your nightly news as we get closer to Thanksgiving. Nintendo may have been hurting as of late but they do know how to get those characters (like Mario) out into the public to help build steam towards the launch. GME will get more than their allocations of units once the initial add ons become known.
    4. GME will dominate in add on / attach rate. This is huge because as the analysts are quick to point out, there are slim margins in hardware. Yes, sometimes GME associates can be a little pushy when asking for extended warranties, extra controllers, books etc. That's what we want here folks! It's a business and the expectation of GME associates is that they sell and keep selling until their customers leave with everything they need. GME will easily outpace Wal-Mart, Target, BBY, etc on that front. Those other retailers are happy to just let the customer buy what they want.
    5. Add ons. Image if you knew that your business was about to see millions of additional customers in the upcoming holiday season. I don't think that any other retailing subset is planning for that. Jewely stores?-no, clothing stores?-no, vitamin stores?-no (not sure why I just said vitamin stores, that was kinda silly). Nevertheless, what would you do? GME will re-introduce them to the trade-in process. GME will have an ultra high attach rate to their "Power-up" rewards program which will help foster the next generation of video gamer. (oh and by the way, I'm sure that their Game Informer magazine will have plenty of articles about the upcoming MS and Sony systems. Priming the pump for those releases as well). They will easily outpace their competitors on in-store physical attach rate. I would estimate that they will attach at a rate that 60-80% higher than any other retailer.
    6. Digital. Oh and then just when you say "stop FrankieJ, I can't take any more of this stock pumping", I smack you in the face with fresh, hot tuna called digital. All of these new customers will see everything that GME is doing on the digital front. The downloads, the streaming, the old PC games, the extra content that will be exclusive to GME etc.

    Well hot crap, don't just sit there and stare at the computer screen. What are you, stupid or something? Get out there and get some shares of GME now before it starts to really take off. Because yes, everything that I'm telling you above will lead to a Q4 announcement that they will raise estimates for Q4 and full year. Then BAM, the shorts take it right in the exit door (you know what I'm talking bout) and the covering will begin like crazy. Ultimately, GME will declare me King of the Universe and I will have lunch with Paul Raines and get my name on a cereal box. Peace out.

    Sentiment: Strong Buy

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    • I completely agree with this assessment. I have my life savings invested in GME for these reasons. You also forgot the short float at over 30% which will be squeezed to hell, and the fact that the other 2 next gen consoles will still have physical media. And the fact that Wii U game sales will be physical NOT digital for the most part because the Wii U DOES NOT HAVE A HARD DRIVE and only paltry storage space. Looking forward to being rich with you after we buy our private jets and meet up for an investor party! :)

      Sentiment: Strong Buy

    • I agree with everything you said, but I guess that's why I have about 25% of my portfolio here. I have learned that most of the time, when there is a high short interest in a stock, it's justified. In most cases, it's because of the history of the management team. I have been burned by that in the past. When I researched GME, I found nothing but positives concerning their management team, and I realized that the only reason for the huge short position was that Jim Chanos publicly said GME would be the next blockbuster video. Since he got famous from shorting Enron, MCI, and Blockbuster, the sheep followed him here. I really think Chanos expected GME to guide lower each qtr for the remainder of their existance, and that's why so many articles from Motley fool talk about lower revenue and margins. There's no way shorts thought GME would reach their guidance of $3.10-$3.30 for the year, so if they raise guidance for Qtr 4 and the fiscal year above $3.30, a whole bunch of shorts are going to have to re evaluate their strategy. On the other hand, if they lower guidance I will re evaluate my strategy. Let the games begin!

      • 2 Replies to johnmr12
      • or the go into the stores and see no one there. Nobody I know goes to Gamestop anymore, they buy their games at Target or Wal-Mart and that iPhone trade-in point is the dumbest thing I've ever seen. Let's lode up on inventory of antiquated technology. Brilliant. To put 25% of your portfolio in anything is pretty dumb, but to put it here....yikes. good luck to you. It's going to sell off after earnings, there's no doubt about that, but it might run up 2 more bucks from here if the sheep like what they see in the distance so if I was long I wouldn't sell here, but I'm not selling my puts either.

        Bottom line, this company won't be around in 10 years, the game is when will the price of the stock reflect that, It could be next year or 5 years from now.

      • Chanos is a #$%$ if he thinks games and movies are the same. He doesn't understand the segment at all. They are literally nothing alike. Gamestop as a physical presence is in NO danger until well after the NEXT generation (not next year's) when consoles MIGHT stop using physical media (10+ years). Until then, GME will be raking in the dough.

        Blockbuster was primarily a rental establishment, not a "jeez, I have to trade in my old games in so GME can resell them for more more money just because I need the money to buy the next hot game" establishment frequented by millions of teenagers. And Gamestop still has the clout to offer exclusive bonuses and other freedbies to folks who pre-order new games through them. I just pre-ordered Dishonored through them not just because I am an investor, but because they're the only ones to offer free themed Tarot cards Stuff that drives collectors crazy.

        Also, unlike movies, the video game business is extremely cyclical, and we're on the verge of another boom cycle like we saw in 2007.

        That's why I am 100% in GME. Call me CRAZY, but we'll see who laughs last.

        Sentiment: Strong Buy

    • Trust me you DO NOT want to have lunch or be associated with Paul Raines.......... This company has cash flow but NO long term vision or direction. It will be sold in a fire sale and stripped for parts or be the next BlockBuster...........

      Sentiment: Strong Sell

      • 2 Replies to michaelahurley
      • Tisk..tisk..tisk. You silly, stupid little man. First off, I like Paul. Seems like a decent guy who's been helping to steer this company through some tough waters. Second, there is a special "secret" to the secret sauce in GME's pasta. Since you are an idiot who probably opens walnuts with your forehead......I'll help you out as to what that is. The secret is the CFO, Rob Lloyd. HE is the one who is making sure that they stay financially sound. While they continue to re-invent themselves, Rob is ensuring that the stockholders will be well positioned for future ROI. Any company can be out of business in 5-10 years. That's not held exclusively for GME. There are plenty of companies out of business today who had no idea they were heading there 5 or 10 years ago. So stop bashing my lunch dreams with Paul and my face on the cereal boxes all across America.

        Sentiment: Strong Buy

      • Typical ignorant short not understanding the industry. Long terms visions aren't even important when your entire industry is CYCLICAL based on console launches every few years. Assuming you were even right, which you aren't. Not only did Gamestop buy the second best performing digital games download service, but you can also buy Steam games on their service, with benefits you don't get on Steam, like PowerUp Reward points. No long term vision my #$%$. Besides, physical media is still here to stay for the next several years, and GME's customers are not going to want to switch to digital games THEY CAN'T RESELL/TRADE in order to get new ones. The standard Wii U doesn't even have built in storage space to hold ONE major game release on it. Get your head out from your #$%$, please.

        Sentiment: Strong Buy

25.01-0.10(-0.40%)Oct 21 4:01 PMEDT