This resistance line dates back to November of 2015. It has only been broken a few times, and only lasted for a couple weeks at most. Here's the weekly:
Man I've been talking about how this is a dying company since back in the $30's/share... Wish I would have/could have shorted this all the way down to where it's at now. Currently sitting at $13.44/share
Wondering why don't people buy physical games? The download codes cost just as much as physical copies, and cannot be traded. With physical copies, if you are the seller/owner you can recoup some of your cost, and if you are the buyer you can get a cheaper game. Also, you need to have the storage space in memory when you go with downloaded games; to say nothing about the cool frisbees that physical games can provide.
If you buy a hard-copy of the game, you usually need to install it on your gaming console anyways for it to run/boot as quick as the downloaded copy. You also need to physically travel to the store to buy it, unwrap the annoying plastic around the case, and insert the disc into the console every time you want to play. Otherwise, you can download a game and have it ready when you get home from work without having to stop at the store. Or if you want to play a game the night it launches, you can have it pre-downloaded and ready to play at midnight before all the nerds at best buy get done waiting in line at midnight and driving home. That's just how I see it anyways. My 30-60 minute time travelling to and from the store and waiting in line at the store is worth more to me than the $5 resell value of the game (exaggerated analogy for effect).
I've been bearish on this company and posted MANY times since the inception of this site. Getting close to single digits now:
I have a sizeable position in this company and am very bullish until the $18-$20 level. The 13% dividend is pretty staggering as well. Physical games aren't going anywhere in the next generation, just google PS5 and next Xbox gossip. They tried to do away with them this current generation and saw the overwhelming push back. 10 years from now is another story perhaps, but playing the now to 36 month window, I'm very bullish at these levels. Basically at an all time low, still quite profitable too. The ThinkGeek site makes a killing on collectibles and "nerd" / retro culture is quite high. Toys R US traffic has to go somewhere and the pre-order programs from the past few years have all died (Amazon had 20% off with preorders, Best Buy had a gamers membership where you paid a fee and got a % off preorders, etc.). The Gamestop exclusives still incentivize people to preorder here and they'll gain market share from the expiring pre-order incentives elsewhere. I get why people have been bearish on the stock, and I would be too in the $20 and up range. But at $11 there is PLENTY of room to run and I expect it to treat me very well this year, not to mention the steady dividend drip that I receive. They also are sitting on a TON of cash! Absurd for a cash heavy and still profitable company to take such a beating while paying a high dividend. Price will definitely rebound on this one.
That actually concerns me. Seems like a pretty high divi to me. I was in the mall this past weekend and the store seemed pretty busy, but personally I have not bought a single thing from Gamestop in several years. All my downloads are digital.
Yeah the high dividend is a scare to a casual eye but not to someone following the stock. They have AMPLE cash flow to pay it. I'm not talking about financing the dividend with debt or paying it out of existing funds, I'm talking about free cash flow to cover it. Also, two ways to look at a dividend. People rush to the "Oh no, it's 10% or higher, it's prime for a cut!" mentality. The other mentality is "Hmm, maybe that 10% dividend is too high because the stock is undervalued." In other words, if you had a stock paying a 10% dividend at $10 a share ($1 annual dividend), that same dividend is only 5% at $20 a share ($1 annual dividend). Stock price going up is equally as important to the dividend percentage as the amount paid out. Some seem to forget that. Either way, video games are my expertise. I'm not as much of a gamer as I used to be but I have an extensive retro video game collection and have bought / sold / traded video games on eBay since 2008 as a side hobby. I'm plugged into the scene and know that there is a huge market that simply will not play digital only. I think that preference will change one day, but it won't happen on this next generation of consoles. And that's really all I care about, bullish on GME in the 12-36 month window and would reassess after that.
Assuming these guys go out of business, what happens to the cash on hand? Looks like they've got $16/share in cash. There is some debt, but after it gets paid and we assume GME ceases to exist, do shareholders get that cash distributed?
Oh man I was extremely bearish on Gamestop when Microsoft announced GamePass, the trend is digital purchases and cloud gaming. It was clear to me Gamestop was behind on the times and going to lose value but it was so beaten up I didn't think it had much to give even if I shorted. Boy was I wrong...
After a 38 cent drop in GameStop (GME), it landed at previous support levels - shown by yellow horizontal line. RSI is right in the middle pointing downward. My prediction is that it will initially drop to around $5.57, then start another bullish run, going to at least $5.88 - previous resistance levels.
