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01-31-2019, 04:48 PM
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#1
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Recycles dryer sheets
Join Date: Jun 2018
Posts: 276
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Gamestop?
I was reading some news and saw some blurb about Gamestop's large cash position.
Evidently they have $1.4B in cash with a current market cap of $1.2B and they are cash flow positive. They also pay some 13% dividend or something crazy.
Anyone have any insight here?
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01-31-2019, 05:06 PM
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#2
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Recycles dryer sheets
Join Date: Jun 2018
Posts: 276
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Maybe if they became a Fortnite hub or something
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01-31-2019, 05:13 PM
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#3
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Moderator
Join Date: Oct 2010
Posts: 10,622
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I thought it looked good at about $22, but Mr. Market says it's only worth half of that. Not sure why.
EDIT: Just read that they had a buyout deal that just fell-through, thus the plummet. First order thinking has them as the next Blockbuster chain, but it's possible that they pivot into another business that could leverage all those storefronts.
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01-31-2019, 05:29 PM
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#4
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Moderator
Join Date: Nov 2015
Posts: 13,846
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Wouldn't touch this one. GS has a unique position in the game market because of their high profit margin from buying used/reselling, but overall games move more and more to digital download only year over year. And many more, like fortnite, are free to play with the only transactions being in-game purchases.
There will of course always be some folks who want a hard copy (collectors editions), as well as accessories, consoles, but those can be bought anywhere.
There's a better than zero chance that, in 3-5 years, they become what Blockbuster is to movies.
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01-31-2019, 06:39 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Aug 2015
Posts: 1,890
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I jut read their 11/3/18 balance sheet and it is showing $454M of cash on hand. But they are carrying a truckload of goodwill ($1.1B) and inventory ($2B). Accounts payable @ $1.5B? At least they don't have a lot of debt, right?
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01-31-2019, 07:21 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Dec 2016
Location: DC area
Posts: 2,464
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If any one's insight can beat the collective wisdom of market and people who get paid to analyze stocks, they are not going to tell you!
__________________
FI and Semi-ER March 24, 2017
Consulting to stay engaged
"All models are wrong, some are useful." - George Box
“There is always a well-known solution to every human problem: neat, plausible, and wrong.” - H.L. Mencken
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02-02-2019, 07:49 PM
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#7
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Moderator
Join Date: Oct 2010
Posts: 10,622
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I think that there were a bunch of people who dumped the stock when the buyout didn't happen. That pushed the price really low. The buy-out buyers were probably going to pay $20 or something like that. So the "collective wisdom" of the market is, in my opinion, probably fairly inaccurate and based on the emotional let-down of not making a quick killing by holding a buyout stock. I'd honor the opinion of the people considering paying $20 more than the herd that dumped it at a loss when their get rich quick scheme didn't come to pass.
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02-02-2019, 08:19 PM
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#8
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,468
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Quote:
Originally Posted by USGrant1962
If any one's insight can beat the collective wisdom of market and people who get paid to analyze stocks, they are not going to tell you!
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+1
From a completely uninformed consumer's viewpoint Gamestop seems to be doing well, and often you just can't beat their online prices and ASAP delivery of new games and consoles to your doorstep, not to mention their extensive buying and selling of used games.
Then a casual search reveals rumors that they are looking for a buyout.
As for inside info, like USGrant1962 says, those who know aren't telling.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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01-19-2021, 01:31 PM
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#9
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Recycles dryer sheets
Join Date: Feb 2015
Posts: 212
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Resurrecting this thread:
Anybody in on the recent Wall Street Bets subforum on Reddit and the push for a short squeeze for GME? Interesting to say the least! I read the "DD" (Due Diligence) on WSB and got in at $18/share (late to the party). Stock is now at ~$40...
This is my "fun money" individual stock money, which gives me a cheap thrill without messing with my retirement portfolio, and scratches that stock trading itch.
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01-21-2021, 02:45 AM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 17,707
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__________________
Ko'olau's Law -
Anything which can be used can be misused. Anything which can be misused will be.
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01-21-2021, 06:12 AM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2016
Location: Northern Virginia
Posts: 7,515
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Quote:
Originally Posted by dadu007
Resurrecting this thread:
Anybody in on the recent Wall Street Bets subforum on Reddit and the push for a short squeeze for GME? Interesting to say the least! I read the "DD" (Due Diligence) on WSB and got in at $18/share (late to the party). Stock is now at ~$40...
This is my "fun money" individual stock money, which gives me a cheap thrill without messing with my retirement portfolio, and scratches that stock trading itch.
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It's interesting. Good time to lighten up.
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01-22-2021, 01:17 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Sep 2006
Posts: 2,840
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Never short a stock with 150% short interest.
__________________
But then what do I really know?
https://www.early-retirement.org/forums/f44/why-i-believe-we-are-about-to-embark-on-a-historic-bull-market-run-101268.html
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01-22-2021, 01:26 PM
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#13
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Recycles dryer sheets
Join Date: Feb 2015
Posts: 212
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Quote:
Originally Posted by Running_Man
Never short a stock with 150% short interest.
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Yup. Up 37% today (was even higher earlier). I've never shorted any stock and don't touch options; too scared! I'm long GME. Really interesting to watch (especially if you have even a small position).
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01-22-2021, 01:53 PM
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#14
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Moderator
Join Date: Nov 2015
Posts: 13,846
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The thing about Gamestop that makes zero sense is no one really buys physical games anymore. Their used market is pretty decent, but that relies on people buying discs to re-sell after they've played through the game.
I know they sell consoles too and cater to folks who want to browse titles in person, but still... we are heavy game consumers in this house and visit gamestop far far less than we did even 5 years ago.
IMO they are tomorrow's Blockbuster.
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01-22-2021, 02:08 PM
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#15
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Recycles dryer sheets
Join Date: Feb 2015
Posts: 212
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Quote:
Originally Posted by Aerides
IMO they are tomorrow's Blockbuster.
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That's the phrase everyone is using...LOL.
You know Michael Burry (of "The Big Short" fame) has a huge position in GME, right? And that Ryan Cohen (of $3 Billion Chewy.com buyout fame) is now the de-facto leader on GME's board?
I have two gamer sons. They STILL use Gamestop... Gamestop can leverage their physical locations to change the retail gaming space (PC build centers, in-person gaming parties...etc.) The BOD has been revamped by Cohen...I think it's possible after reading up on it...VERY interesting.
OTOH, I could be totally wrong!
If you want a real kick, search for "Roaring Kitty" on YouTube. This guy spent about $50K on options when GME was $4.00. After today, he'll be well into an 8 figure position on GME.
Fun to follow, in any event!
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01-22-2021, 02:17 PM
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#16
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Moderator
Join Date: Nov 2015
Posts: 13,846
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This is why I never buy something that makes no sense. DH and I are first gen gamers - we grew up on Atari. We have every console, and we don't use GS anymore. If DH really wants a physical, it's usually a collector version and he preorders via amazon. He will, on occasion, pick up a small bundle of very cheap resale games at GS, but that's a far cry from days of old. Everything else pretty much is via Steam.
Yes, they could do more with their retail spaces, but they haven't, yet, so I'll stay out and watch from the sidelines. I don't care which big names like them, I'm sure the best investors have some misses from time to time.
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01-22-2021, 02:54 PM
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#17
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Recycles dryer sheets
Join Date: Feb 2015
Posts: 212
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Fair enough, @Aerides.
And please know that I'm not being argumentative.
But think of it this way...There is no other countrywide chain of gaming stores for kids and adults to gather at, besides Gamestop. Not that I can think of...Yes, they're closing underperforming stores, but they still have many, many locations. After we're past COVID, the pent-up demand for in-person game purchasing and gaming activities will break loose. (IMHO, that is...Video gaming itself is obviously through the roof with COVID, but not "in-person" gaming or buying).
Also, it's not just video-specific gaming out there... There's Dungeons and Dragon's stuff, Magic the Gathering, and other role-playing games. My oldest son does a LOT of RPG stuff..my younger son JUST bought a Nintendo Switch with his own hard-earned money so he can play with his friends, both in small (bubbled) groups and online.
GME is also focusing on collectibles, peripherals, and other PC stuff...So, as I understand GME's plan, it won't continue as just being about ordering stuff (like from Amazon). It's the "gaming experience" they're after. (I'm a little dumbfounded that e-sports is being proposed as an Olympic sport, btw!)
I enjoy the discussion and hearing myself present GME's "story" as a stock. I'll check in later down the road. Thx!
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01-22-2021, 04:18 PM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 10,308
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Quote:
Originally Posted by gstillson
I was reading some news and saw some blurb about Gamestop's large cash position.
Evidently they have $1.4B in cash with a current market cap of $1.2B and they are cash flow positive. They also pay some 13% dividend or something crazy.
Anyone have any insight here?
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From Rick Ferri's " All About Asset Allocation": "There is a classic saying on Wall Street, 'What everybody already knows is not worth knowing.' "
__________________
Ignoramus et ignorabimus
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01-26-2021, 05:13 PM
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#19
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Thinks s/he gets paid by the post
Join Date: Sep 2006
Posts: 2,840
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Quote:
Originally Posted by OldShooter
From Rick Ferri's "All About Asset Allocation": "There is a classic saying on Wall Street, 'What everybody already knows is not worth knowing.' "
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Gamestop is up 200% since this post! The interesting thing is there is no limit to the losses the shorts can have to endure in their quest to watch Gamestop drop from 20 to 10. A 100 million dollar short now has 600 million trying to win that 50 million.
__________________
But then what do I really know?
https://www.early-retirement.org/forums/f44/why-i-believe-we-are-about-to-embark-on-a-historic-bull-market-run-101268.html
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01-26-2021, 06:51 PM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2013
Posts: 11,078
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Quote:
Originally Posted by Running_Man
Gamestop is up 200% since this post! The interesting thing is there is no limit to the losses the shorts can have to endure in their quest to watch Gamestop drop from 20 to 10. A 100 million dollar short now has 600 million trying to win that 50 million.
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+1
I know I was too chicken to get in at $60, then $90. After hours it's $220.
They already have the next target lined up, I'm going to play.
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