This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

GameStop Is Not Blockbuster, Which Could Be Bad for Short Sellers

NEW YORK ( TheStreet) -- Many believe GameStop (GME - Get Report) is fading faster than Blockbuster Video, but company fundamentals signal that the video game store may be around longer than you think.

Short sellers have beaten up on GameStop this past year, pushing its share price down nearly 30% off of its 2013 highs, while also taking on a 26% short float of the company's shares outstanding.

The thesis for GameStop's demise revolves around the idea that most of their business is migrating online.

Digital purchases were shown to have accounted for about half of the $1.5 billion spent on games in May, according to industry-tracking research firm The NPD Group.

The worry, however, may be overblown at this point, meaning GameStop's share price -- about $40 in mid-afternoon trading Friday -- is severely undervalued.

GameStop's sales increased throughout the 2008 recession, and have stayed flat the past three years. Even as gaming has gone digital, the company managed to maintain consistent market share. GME Revenue (Annual) Chart
GME Revenue (Annual) data by YCharts

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
GME $39.17 0.00%
AAPL $128.95 0.00%
FB $78.99 0.00%
GOOG $537.90 0.00%
TSLA $226.03 0.00%

Markets

DOW 18,024.06 +183.54 1.03%
S&P 500 2,108.29 +22.78 1.09%
NASDAQ 5,005.3910 +63.9670 1.29%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs