Views on Gamestop (GME)
I was wondering if anyone had any thoughts on them.
They're up 119% year to date and they report this Thursday.
Thanks.
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I have lots of thoughts on them.
Maybe you guys should use search before mindless throwing crap at me?
) Secular decline is over-rated due to age of current gaming cycle 2) GME has one of the BEST customer loyalty programs in all of retail 3) Company's ability to grow organic sales in the great recession is a testament to the power of the model 4) Management is super shareholder-friendly 5) Company is generating ~20% FCF and using it all for dividend/share buybacks 6) Management's is innovative (will do smart things to unlock shareholder value) and Street is underestimating the company's own mobile/digital investment 7) GME is the sales force for SNE/MSFT/NTDOY and they need each other. They will work to keep each other happy/profitable.
//www.wallstreetoasis.com/blog/blackhat-loves-orly-o-really-i-asked-why
Video games are increasingly going to an online delivery system. Sure, they have Impulse, or whatever it's called, for online delivery of PC games, but with bricks and mortar stores they're likely going to be in the same situation as Best Buy before too long.
On the flip side, emerging markets are still a strong selling point for GME, as are reselling of used games and equipment.
If the xbox system/microsoft had really gone through with the no used games policy, then damn would they have been screwed. I see it as just testing the waters for the future. It seems like the gaming industry would love to cut them out of the picture and increase margins.
Personally, I like going to Gamestop to pick up games, even though I'm pretty bearish on the stock long term. I wouldn't short them, because the timing is too hard to get down, but I wouldn't be long either.
New generation of gaming consoles launching this holiday season. Not surprised there's some rise in anticipation of that, or in reaction to the PS4 which just came out last Friday. Lots of the big-title games are still being pushed at brick & mortar stores. And with the "I want it now" mentality of gamers, you're not going to pre-order on Amazon and wait for the shipping when you could just stop by a GameStop and pick it up. Yes, I know Amazon almost guarantees release-day delivery, but when does FedEx/USPS deliver? In the afternoon. Fuck that. We want our games in the morning.
Why has GME stock increased so steadily? (Originally Posted: 11/11/2013)
Gamestop (GME) is one of my favorite companies because I love video games and it was one of my favorite places when I was a kid. Since it's a retailer, I never would've expected it to perform well, but in the past 6 months or so, its stock price has seen a very steady increase, from around $30/share to over $50/share.
I initially thought to myself why, but couldn't find a very distinct answer. Originally, I thought it'd be the anticipated release of the next gen. gaming consoles, but consumers can buy that at any retailer. In addition, Gamestop has other advantages such as a repertoire of gaming accessories, used games at a discounted prices, and trading your old games. However, that doesn't explain why its stock prices has increased steadily only now.
Forgive me if I sound stupid. I'm still just trying to learn.
Their used game policies make an enormous amount of money and it continues to grow. That's why when Microsoft implemented those used game policies for the XBOX one, they tanked 20%.
http://games.yahoo.com/blogs/plugged-in/gamestop-stock-plummets-followi…
Also just because people can buy next gen consoles from other retailers doesn't mean it's not a positive for GME as well. It's likely that all retailers, including GME, that sell next gen consoles will benefit.
These consoles could also provide a boost to GME's other lines, like selling used games on old consoles, etc
I think it was significantly undervalued before this year because the market expected a move to a more cloud based game distribution system. In addition, I don't feel the market realized GME's margins on their used games resale
I was destroyed buying puts last year and learned never to challenge a cash-flowing, value play again. Long-term there is clearly business model problems, but so long as it keeps kicking off cash and isn't trading at ridiculous multiples, it should remain stable.
lol
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