Tag: GME

GME: closed trade

After reviewing GME’s Q2 results, I exited my position this morning for a 20% gain. On balance I thought the quarter wasn’t that bad, but the likelihood of an aggressive buyback is lower. This was a large part of my prior thesis, so I’m trying to avoid thesis drift and move on with a profit. I’ll continue following this one. Most notably, the company reduced its FY 2019 SSS guidance from -5-10% to “a decline in the low-teens.” It was already clear that the late-cycle hardware headwinds and tough holiday comps made the prior guidance unrealistic, but management finally addressed […]

GME: recommending a trade (long)

After taking a first look at Gamestop at $5.50 and passing, the stock is down 28% to $3.98. I recently took another look, refined some of the analysis, and initiated a small trade with room to add more. Although I continue to believe that GME is facing significant challenges to its business model, I’m slightly more constructive in certain areas and do believe that you’re finally getting properly compensated for these uncertainties at the current price. I also believe that the prospect for near-term capital return should provide somewhat of a floor to the stock near these levels. I’ve refined […]

GameStop (GME): optically cheap special situation, but passing

Situation overview GME is the leading specialty video game retailer in the world. Most are aware that the company has endured tremendous secular pressures over the last several years. It’s been common for 40%+ of the float to be sold short at any given time, yet the company continued to produce solid levels of FCF for many years. With that said, it appears that industry pressures have finally caught up with GME – the stock is down ~75% over the last 2 years. I’ve followed the company at a high level for some time, but decided to refresh my work […]