GameStop (GME -0.1%) could be a beneficiary of the decision by Target and Wal-Mart to stop...


GameStop (GME -0.1%) could be a beneficiary of the decision by Target and Wal-Mart to stop selling Kindle tablets after it worked out a deal with Amazon to offer the products. In what's becoming its go-to marketing tactic, the company will offer consumers store credit for trading in their old Kindle Fire devices. Though it's up in the air if the company will see a big profit swing from the deal, execs continue to be praised for their ability to help keep the retailer out of the brick-and-mortar junkyard (Blockbuster, Borders, KB Toys) as technology evolves beyond its core product.

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Comments (3)
  • J Mintzmyer
    , contributor
    Comments (8166) | Send Message
     
    This has always been a horrendous comparison-- up nearly 60% since my buy article in August. I see a fair valuation as 8x my 2013 projection of $4 EPS, or $32 per share.

     

    http://seekingalpha.co...
    10 Dec 2012, 12:53 PM Reply Like
  • Ted Bear
    , contributor
    Comments (700) | Send Message
     
    GME is a classic zombie short. It is a horrible company with a broken business model. Reminds me of Blockbuster.

     

    What we have seen over the past few months is the professional shorts piling in. Then the retail guys piled on. Now we have just gone through the classic short squeeze/buy ins for the weak shorts. Hence the price run up on 'no news'.

     

    What's next? Watch the news. If the fundamentals continue as expected, the thing will just implode as the cornered longs have nowhere to go. The machines and the shorts will exacerbate this selling.

     

    If the fundamentals turn around, the longs will sell the strength, the shorts will cover into their selling, and we start the cycle all over again. The current price from the buy ins already reflects any good news which might come from this company.

     

    My money is on the shorts,,,,,or at least the bottom falling out of the fundamentals for this once high flying company.
    10 Dec 2012, 01:36 PM Reply Like
  • J Mintzmyer
    , contributor
    Comments (8166) | Send Message
     
    Ted-- we had 44M shares short as of Nov 15. By next year GME will have less than 100M shares diluted, considerably less on the float.

     

    There's not a single short that's above water (unless they did a covered put), so the potential squeeze is just beginning. That said- I wrote a piece on GME at around $18 and I sold half my position last week around $26-- the rest I'll sell above $32.
    10 Dec 2012, 04:41 PM Reply Like
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