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Varchild2008 (84.31)

Varchild is Shorting Jim Chanos



October 17, 2011 – Comments (1) | RELATED TICKERS: GME

So Jim Chanos sticks his neck out and says Gamestop is a 100% Bricks and Mortar company with thousands of stores of which they own and can't get rid of very easily.


That's pretty much the gist of what he said right there...


A)  Gamestop is Game Informer with nearly 6 million subscribers and +50,000 new subscribers on average per month.

B)  All of these BRICKS and MORTAR are just leases.   Gamestop could always decide not to renue some of these leases and they would be completely out of the Brick.  That is a far cry from actually owning 6,500 buildings.  You are essentially just a renter...Renters can get out of their rent much easier than a owner....just ask a Home Owner about that Chanos!

C) Impulse has taken quite a huge chunk of Digital Sales for Deus Ex: Human Revolution for Gamestop.   Especially considering that Gamestop at least for a time if not entirely stopped selling physical copies of Deus Ex.  Therefore, there was an artificially inaccurate PC sales figure in September's NPD report (showing a drop of 4% instead of a rise).  That happens when 6,500+ stores aren't selling physical copies of Deus Ex.

D) Kongregate has several times (I witnessed it myself) shown over 50,000 online playing nearly 50,000 flash based games on the web.  That's pretty impressive considering kids are back to school.

E) Jolt Online remains a Mobile App developer for Gamestop that continues to produce interesting titles.  Not much of a needle mover in Gamestop's overall business, but  a solid example of how
DIGITAL  Gamestop is.....Analog by Butt CHANOS!!

F)  A Growing wave of Shorts/Puts/Anti-Gamestoppers  viewing the company as a Value Trap point to Redbox.

Well?  I point to Spawn Labs.  Whose to say Spawn Labs won't become a Rental Service of sorts once it goes live early next year?

Would you want to hop into your all the way down to the nearest redbox...Then hop out and mess around with the Redbox machine renting a Video Game....then drive all the way back to your house...

Then after you are done playing the game....Drive back into your car to Redbox....Deposit the Video Game Rental....Drive all the way back home?

How about saving some Gas Money and with SPAWN LABS you can just check out a game with a few touches of a button once you have Spawn Labs software installed on your Tablet!

Can you imagine that?  You are at a Coffee House....Sipping on a Latte......playing all kinds of video games on your Tablet through Spawn Labs? 

Never once caring about the fact that the nearest Redbox is 5 blocks away from you?

Gamestop should fear Redbox???

How about REDBOX fearing SPAWN LABS?

How about demanding JIM CHANOS do his homework on Gamestop before speaking about a company he obviously knows NOTHING about.

D)  I haven't even gotten into Gamestop's iPhone, iPod, iPad refurbishment, trade-in program!!!
Or the up coming Gamestop Endorsed Gaming Tablet and bluetooth joysticks..

E)   I haven't even talked about Gamestop paying off a huge Chunk of their Senior Notes debt this month.

F)  I haven't even gotten into Gamestop's big time share buyback program...

G) I haven't even gotten into the fact that Gamestop's has stood by their full year guidance for the year.

I) I haven't even gotten to the fact that Gamestop has already announced in a press release / interview of sorts that Battliefield 3 sales have reached record numbers!

J) Oh and Call of Duty Modern Warfare 3 + Zelda + Halo is coming in the next 2 months.

1 Comments – Post Your Own

#1) On October 17, 2011 at 5:14 PM, Varchild2008 (84.31) wrote:

K)  I didn't even get into the 13 million Powerup Rewards Members Gamestop has...

L)  Oh and this *VALUE TRAP* is going to integrate Spawn Labs into so you can DEMO video games before deciding to buy them  (refer back to Investor Days).

M) Oh....and I forgot to get into Kongregate Arcade....With the huge popularity of Galaxy SII and the upcoming Nexus Prime, the Android Market is quickly growing its market share.

They had 43% market share...while iPhone had about 23% (if memory serves me correctly).

N)  Oh....geeze....This Value Trap....I forgot to mention the fact that Gamestop had announced in their most recent Quarterly Conference Call that they have quite a big chunk of share of the DLC market share.

Gamestop bundles DLCs in with the purchase of a Video Game.
So, that helps them sell DLCs....and in essence take over the lions share of the DLC market place.

Oh but go ahead and worship a Hedge Fund Manager.

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