In the Thursday "Sell Block" segment, Cramer said it's not too late to sell GameStop (GME - Get Report), a stock he said should be renamed to "Game Over." On Tuesday, Game Stop released its eighth consecutive quarter of disappointing results, with same-store sales falling another 4.6%. The company also forecast that sales will further decline in its fourth quarter.
Cramer said that the gaming business is going through a major transformation, with a large segment of gamers turning to online social games over the console games that Game Stop sells. He said some see the weakness as only a cyclical trend, one that will self-rectify with the release of next-generation consoles from Microsoft (MSFT) and Sony (SNE). But Cramer said he's not buying this thesis, as these next-generation consoles will likely include the ability to buy games directly from the vendor.
Cramer said another red flag for him was the rapid decline of used games, which accounts for 38% of Game Stop's revenue and was to be the company's salvation as those games offer much higher margins. Cramer said Game Stop is clearly now competing directly with Amazon.com (AMZN), and we all know how well that worked out for Best Buy (BBY).Cramer said that while some investors are betting on a takeover of GameStop, that will not be likely given the company's declining fundamentals. He told investors not to be tempted by GameStop's 4.4% yield, as the declines in the stock price will surely wipe out any gains from the dividend.