It’s a cold, cold world. 

 

I hope they go out of business soon. Can't stand Gamestop.

I'm dead serious.

If Jonas knows of an example of that scenario actually happening, I would find it fascinating reading.
(scenario being "shutting doors tomorrow and liquidating" to hand cash out to shareholders)

But there are tons of examples of what I reference -- price gets too far below cash value, raiders go in big and dismantle the company.
And they don't just extract the literal cash -- they take on a shitload of debt so that shareholders get zero once assets are fully liquidated, as everything goes to attempting to pay off the loans and bond holders.

 

Hasn't anyone seen Wall Street?  Great flick by the way.
 

GameStop won't survive the next generation. Devs and studios hate GamesStop's second hand business model and have done all they could to stop it. Thinking otherwise is profoundly ridiculous.

Run a stock screener to see what companies are trading below cash value. It generally implies that the market fears the company is either overridden with debt (way more than the cash you hold) or that the company is bleeding cash so fast that the cash reserves won't last that long. Gamestop is neither.

I didn't buy Gamestop stock for a quick flip, remember I was in around $13 and had chances to sell at $16. I bought as a long expecting to hold 2-3 years and maybe up to 5 now. I'm not scared of Gamestop bankruptcy anytime in the next 5 year window. 10 years and beyond not so sure but next generation will still have physical drives. The NRE has already been spent to engineer them (and required for physical backwards compatibility) so no sense to remove then when you already spent millions in sunk costs.

In terms of raiders buying out a company and riddling it with debt, look no further than Toys R US. That's why they died.

That is my point, and I don't think you're really reading my posts if you missed the crux what I was asking for with an "example".

There are MANY examples similar to Toys R US.  They are nowhere near unique in how they were pillaged.

I am asking for YOUR counter-example, of a company that EVER just closed up shop and doled out the cash to shareholders.
(your supposed "worst case scenario" of just handing out the cash and selling all the assets where all proceeds end up with retail shareholders)
 

Arch Angel - I know you're serious, I was thinking about Toys R Us and Seares. Also, apparently investors are trying to buy up hospitals in neighborhoods that are gentrifying so they can force them to close through over leveraging and then use the land for real estate.

Edit: Jinx

Be honest about this, though... you bought at those levels because of the now-obvious-in-hindsight "dividend trap".

But that horse is out of the stable, and is almost certainly not coming back.

They don't have to go bankrupt for the stock to maintain a longterm price where you never realize a gain.
 

I don't need to realize a gain, I just know I'd rather be a holder than a seller at $3.50. You can also write off $3k in stock losses a year and that would offset some of my dividend / other capital gains at least. I'll revisit the stock value in Nov / Dec and re-assess if I sell any shares at a loss this year to reduce my tax burden.

If your end-game is $3k/year in losses for tax purposes, you could still carry those forward by liquidating now and putting your remaining cash in better quality investments.

That said, from what I recall of numbers in your other posts, the $-value you're still holding is nothing to lose sleep over if it goes to zero, so waiting to take those losses is pretty harmless in the scheme of things.

 

Well Trump "delayed" the taxes on imported consumer goods from China.I'm happy because it was the right thing to do, but it really does highlight what a jack ass he is. People who vote for Trump should have to walk around with something that shows they voted for him so we can all know who to blame.

Oh great, the political discussion cancer is spreading from the Election talk thread.
 

I'm not going to push it, but considering the bounce in the market after Dumb Dumb's announcement, I'm pretty sure that belongs in this thread.

Irony being GME was up 5% before the tweet, while the rest of the market was down, and is now down 1%+ for the day at $3.47 while the rest of the market bounced back pretty aggressively.


 

Ok, here's my take, and I really need to read their 2Q financials before getting into more detail, but..

The liquidation price is only one factor in the current stock price. If the company announced tomorrow that it was going to liquidate, the market would immediately revalue the company. Until then, it's priced as a going concern. No one is valuing, say, APPL, as if it's going to shut its doors tomorrow. The market is hammering GME since, despite their best efforts, it's attempting to be an ongoing concern.

I'm curious at how you got $6 liquidation value, BTW. They have to settle substrantial outstanding debt in a receivership situation, and their assets would likely not go for full market values.

Having that much cash around as fraction of company value is actually a big concern in my view. It demonstrates the company has no solid strategy on how to invest its equity. A lot of the cash on hand will likely go to paying off their 2021 debt tranche.

Buying back 12 million shares of stock at 5.20 - 6.00 when the stock is now $3.50? Brilliant!

So I guess we have been viewing the same variables (abnormally high dividend [until it disappeared], company strategy, equity position) and drawing very different conclusions. We should check back at year end and see where things stand. I'll read their financial statements in detail in the next week or two when I have some time.
 

They had so much cash because they raised $750M by selling off their phone business last winter, which I loved by the way. They have a vision on building on their core of video games. Turning their stores into hangouts with live gaming and demos as opposed to a point of sale only. Kind of like an apple store but not that sophisticated. Also investing in egaming and sponsoring teams, star players, etc. They know what they're doing I'm not scared at all. If I was I would have sold the loss long ago...

I'll just laugh in a year when the staunch "facts" are proven to be wrong, yet again.

GameStop is dying. Better to admit that sooner than later.

Big "oof"... GME rapidly approaching $3.25. (down 6% with rest of market only down 1.5% due to the yield inversion news)

Now that the dust has settled, what are people's take on AbbVie's acquisition of Allergan? I worry about the combination of two companies that rely so heavily on one product for their revenues. With patents expiring in the near future and no big drugs in the pipeline, I wonder where this company is headed. However, AbbVie's stock has been hammered and I'm wondering if it might be a good time to take a chance on it bouncing back.

Horrendous day for BYND. (down 10% on no news in particular)

The second round of funding isn't happening for awhile, so I wonder what adjustments they will ultimately need to make if that round can't happen at the $160 they were hoping for.
(though the time it took for the initial drop to the $160-range on the news of the second offering was pretty surprising)


Pricing/value on BYND is still crazy, though.

But....the e-gamer sponsorships will save them!   
 

Well, the "oof" continues as they are down to $3.18 at the moment.
 

Yeah, they can't all be home runs.   Any bright lights coming up are greatly outweighed by their own incompetence.

Stock price should drop a dollar based on their website redesign this week alone.
 

Haven't kept up with any GME news beyond what press releases and stories get associated with the ticker, so I didn't realize they decided on a site redesign.

Probably not what investors are reacting to, in general, but given your assessment it isn't doing them any favors!