GameStop's (GME) Sharp Reverse; Management Soothes Any Concerns; Stock Hits New Highs

by Jon C. Ogg
November 21, 2006

GameStop (GME) managed to rectify themselves in the conference call today.  The numbers looked light on revenues in the press release, but the company was able to address this adequately in the conference call.  Management was very enthusiastic here and the shares managed to continue rising during the call on what appears to be a lack of any aplogy for its quarter and a very positive and upbeat message from the management.  At 9:00 AM this looked like a potential problem, but the earnings calculations and guidance metrics in the press release were only part of the story.

They also said part of the guidance that was up for interpretation was impacted because of severe supply limitations on the new PS3’s and Wii’s that came out last week.  The company is also saying that Xbox 360 hardware, games, and peripherals are running very strong that it said should even come through in the NPD data in a couple weeks.

Now with management being strong and unapologetic, you just get the feeling that they were being very conservative in guidance for legal ramifications.  This 14% to 18% growth in same store sales forecasts is also what is helping.

As far as combining A shares and B shares, but that has not yet been determined.  To see a stock that has been quite strong over the last quarter to the tune of a 40% rise drop down before the open, open weak under the $50.00 mark, and then come back to over $54.50 is something of a feat. 

This now takes it to a new year high after trading over the old $54.48 highs.  Now that is something you don’t see every day.

Sponsored: Tips for Investing

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.