Author Topic: GME - Game Stop Corp  (Read 22287 times)

Foreign Tuffett

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Re: GME - Game Stop Corp
« Reply #80 on: August 20, 2019, 04:54:31 PM »
Layoffs today at corporate office and Game Informer magazine. IIRC new CEO mentioned something on the last call about SG&A having been allowed to deleverage, so this development isn't much of a surprise.

https://kotaku.com/gamestop-lays-off-over-100-people-including-nearly-hal-1837418024


gfp

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Re: GME - Game Stop Corp
« Reply #81 on: August 21, 2019, 03:52:12 PM »
Burry is talking to Barrons reporters some more about this one.

By the way - the August 14th 13-F is not the holdings as of August 14th, it is the holdings as of the end of the second quarter, June 30th.

Yet the press release says on Aug 16 he sent a letter to Game stop

https://www.businesswire.com/news/home/20190819005633/en/Scion-Asset-Management-Urges-GameStop-Buy-238

It also says

"As of August 19, 2019, Scion Asset Management and its affiliates own 3,000,000 shares, or 3.3%, of GameStop Corp. common stock:"

I guess he holds it, but the pattern in the 13-f looked weird. He must have rebought after the Aug 14 13-f filing?

TBW

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Re: GME - Game Stop Corp
« Reply #82 on: August 22, 2019, 01:02:47 AM »
This strikes me as a bad idea.

It's not like this cash is excess.  GME has large working capital needs.  Their payables are large-ish, and inventory isn't turning over as fast as it was.  They also have debt that almost equals the cash.  Debt with declining sales and negative operating leverage is scary.  This idea would increase leverage by a lot.  Seems misguided.

In situations like this, especially with valuations this low it seems better to me to reduce debt.  That increases probability of survival, which should increase the stock.  Perhaps by a lot.  It would also increase earnings by ~20%.  The debt is due in Mar21, that is soon and I wouldn't rely on their ability to refi this bond. 

If GME melts less slowly the stock will go up.  And it will go up a lot more if they did this buyback.  However, it also increases the risk they fail sooner.  To me it seems like a risky bet, when the upside is already huge.  I don't understand that logic.

A better option here.  Tender for half of the debt, then use the cash from operations (which will increase) to buyback stock.

scorpioncapital

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Re: GME - Game Stop Corp
« Reply #83 on: August 22, 2019, 01:13:01 AM »
They could probably still retire at least 50% of the equity and still pay off at least 50% of the debt. That would seem more balanced, plus with the short interest and the credible ability to buyback even 50%, that could cause a temporary large spike despite declining metrics.

Foreign Tuffett

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Re: GME - Game Stop Corp
« Reply #84 on: September 10, 2019, 11:49:24 AM »
Two predictions for GME's earnings announcement after the market close:

1) Dividend will be cut, or even eliminated completely

Dividend eliminated

2) The word "transformation" will be used liberally

Second sentence of the press release: "We believe we will transform the business and shape the strategy for the GameStop of the future"

Last Q I was 2/2 on predictions. Predictions for GME earnings today:

1) Excluding the tender offer, no share repurchases. Instead, they will have continued retiring debt in Q2.

2) Management will talk at length about new store concepts and making stores more experiential.

3) Management will talk at length about cutting costs.

4) Management will call out hardware weakness

5) Management will call out where we are in the gaming cycle

6) The "pre-owned and value" will show another big Y/Y gross profit decline, perhaps another -20% #



writser

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Re: GME - Game Stop Corp
« Reply #85 on: September 10, 2019, 12:59:31 PM »
This will be fun. You should distribute bingo cards next time.
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.

Foreign Tuffett

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Re: GME - Game Stop Corp
« Reply #86 on: September 10, 2019, 01:55:45 PM »
This will be fun. You should distribute bingo cards next time.

Ha ha ha. Maybe.

Anyway, earnings look absolutely horrible.....worse than I expected, and I expected bad.

RadMan24

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Re: GME - Game Stop Corp
« Reply #87 on: September 10, 2019, 05:06:22 PM »
They're not that bad considering Sony and Microsoft announced new gaming consoles were coming.
« Last Edit: September 10, 2019, 05:08:15 PM by RadMan24 »

Foreign Tuffett

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Re: GME - Game Stop Corp
« Reply #88 on: September 10, 2019, 06:55:02 PM »

Last Q I was 2/2 on predictions. Predictions for GME earnings today:

1) Excluding the tender offer, no share repurchases. Instead, they will have continued retiring debt in Q2.

Correct

2) Management will talk at length about new store concepts and making stores more experiential.

Correct

3) Management will talk at length about cutting costs.

Correct

4) Management will call out hardware weakness

Correct

5) Management will call out where we are in the gaming cycle

Correct

6) The "pre-owned and value" will show another big Y/Y gross profit decline, perhaps another -20% #

-19.2%, so I missed on this one