5xEBITDA Posted August 6, 2019 Share Posted August 6, 2019 Do you think the NCAV will shrink or grow? If it shrink, stock price would follow. I mean I like the balance sheet and the cheapness is very tempting, but it is hard for me to see the business turns around this year... It's probably going to shrink faster than....a.....certain part of the male anatomy in an ice bath. I was able to sell the small position at > $3.70 this morning. Congrats on the 16839200% IRR Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted August 20, 2019 Share Posted August 20, 2019 Michael Burry (yes, that Michael Burry) has gone activist on GME. https://www.businesswire.com/news/home/20190819005633/en/ Link to comment Share on other sites More sharing options...
scorpioncapital Posted August 20, 2019 Share Posted August 20, 2019 The 2nd to last 13-f shows Game stop. The last 13-f august 14 does not. Did he sell, then rebuy in? Link to comment Share on other sites More sharing options...
stahleyp Posted August 20, 2019 Share Posted August 20, 2019 The 2nd to last 13-f shows Game stop. The last 13-f august 14 does not. Did he sell, then rebuy in? That's what I'm assuming. Probably taking tax loss harvesting if I had to guess. Link to comment Share on other sites More sharing options...
scorpioncapital Posted August 20, 2019 Share Posted August 20, 2019 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? Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted August 20, 2019 Share Posted August 20, 2019 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 Link to comment Share on other sites More sharing options...
gfp Posted August 21, 2019 Share Posted August 21, 2019 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? Link to comment Share on other sites More sharing options...
TBW Posted August 22, 2019 Share Posted August 22, 2019 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. Link to comment Share on other sites More sharing options...
scorpioncapital Posted August 22, 2019 Share Posted August 22, 2019 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. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted September 10, 2019 Share Posted September 10, 2019 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% # Link to comment Share on other sites More sharing options...
writser Posted September 10, 2019 Share Posted September 10, 2019 This will be fun. You should distribute bingo cards next time. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted September 10, 2019 Share Posted September 10, 2019 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. Link to comment Share on other sites More sharing options...
RadMan24 Posted September 11, 2019 Share Posted September 11, 2019 They're not that bad considering Sony and Microsoft announced new gaming consoles were coming. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted September 11, 2019 Share Posted September 11, 2019 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 Link to comment Share on other sites More sharing options...
EricSchleien Posted September 25, 2019 Share Posted September 25, 2019 I did a recent post on GameStop on my blog. My view is they need an activist. Also not convinced they will listen to Michael Burry. Link: https://www.gscm.co/blog/gamestop-longs-should-run-a-proxy-contest Best, Eric Link to comment Share on other sites More sharing options...
Guest roark33 Posted September 26, 2019 Share Posted September 26, 2019 I read your post, what do you think the activist should do? I think you need to make more clear what a new CEO would do? Slowly run the business for cash? I don't even think the company will produce any free cash flow this year and maybe not even again? Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted December 10, 2019 Share Posted December 10, 2019 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 OK, time for round 3. My predictions this Q are similar to last Q. 1) Sorry Dr Mike Burry, no share repurchases. Instead, they will have continued retiring debt in Q3. 2) Management will talk about new store concepts and making stores more experiential. 3) Management will talk about cutting costs AND closing stores. 4) Management will call out hardware AND software weakness. They will mention no RDR2 equivalent release this year, as well as that this year's COD game released later in the Q 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% # No position Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted December 10, 2019 Share Posted December 10, 2019 Wow, they bought back "more than one-third of our outstanding shares" even as SSS fell by 23.2%! The banzai charge theory of capital allocation. Apparently I was giving the current management team too much credit by assuming that it wouldn't risk the possibility of driving the company straight off a cliff. Link to comment Share on other sites More sharing options...
scorpioncapital Posted December 10, 2019 Share Posted December 10, 2019 By banzai you mean kamikaze perhaps? ) Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted December 10, 2019 Share Posted December 10, 2019 By banzai you mean kamikaze perhaps? ) Google it Link to comment Share on other sites More sharing options...
Guest roark33 Posted December 10, 2019 Share Posted December 10, 2019 I like to follow GME because it is such a good case study on capital allocation. Spring Mobile, now 34% share buyback in one quarter. These are basically real-time lessons on corporate activity. Some investors hate to follow bad companies, or dying ones, like this, but there are just too many great lessons to ignore the GMEs of the corporate world. Link to comment Share on other sites More sharing options...
thepupil Posted December 10, 2019 Share Posted December 10, 2019 is my Bloomberg right? do Gamestop 2021 bonds really trade at par / 5.7% yield? I wonder if there's borrow... Link to comment Share on other sites More sharing options...
BG2008 Posted December 10, 2019 Share Posted December 10, 2019 is my Bloomberg right? do Gamestop 2021 bonds really trade at par / 5.7% yield? I wonder if there's borrow... I would short the bonds as well at a 5.7% yield Link to comment Share on other sites More sharing options...
aws Posted December 11, 2019 Share Posted December 11, 2019 At the end of the quarter there were 67.8 million shares outstanding and according to NYSE 67.24 million shares were shorted. Almost topped 100% there. Link to comment Share on other sites More sharing options...
thepupil Posted December 11, 2019 Share Posted December 11, 2019 traded down 6 points to $94 / 12% yield. I would still short if there was borrow and if IBKR did not require me to short $100K of face lol. Your order has been rejected due to limitations of the corporate bond borrow market. Orders to sell short corporate bonds must result in a net settlement of at least $100000 face value. Link to comment Share on other sites More sharing options...
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