Netflix went digital and ended Blockbuster’s physical distribution reign.
The same thing is happen with the distribution of games. So it was a no-brainer for me to conclude Gamestop was dead money and was going to $0 in the coming years.
GameStop…Is The Next Blockbuster – Part 2
GameStop Corp on Tuesday halted its quarterly dividend after reporting a 13.3% fall in first-quarter revenue that missed analysts’ estimates, hurt by slowing sales of video games and consoles at its stores.
The gaming retailer has been struggling with shrinking profits as consumers shift to downloadable videogames instead of buying physical versions from stores.
GameStop also faces a major threat from the rising advent of game streaming, with technology giants like Alphabet Inc’s Google, Microsoft and others getting into the still nascent space.
The company forecast comparable sales for the full-year to fall between 5% and 10%, while analysts were expecting a 4.9% drop in same-store sales.
GameStop’s net income fell to $6.8 million, or 7 cents per share, in the quarter ended May 4, from $28.2 million, or 28 cents per share, a year earlier. Net sales declined to $1.55 billion from $1.79 billion.
I can’t even say Gamestop is being Amazoned, it’s just Gamestop’s business model no longer holds weight in today’s world. History repeats itself and/or comes back in a different form. I have been following the Markets since 2000, so I have benefited from seeing several cycles of booms and busts.
Gamestop is down almost 33% since I last posted about them three months ago. Price is in the process of breaching the monthly demand at $6.50. I was expecting price to at least pause at the level, but also expecting gravity to pull the stock down further.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.
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