After falling 6% in the wake of its earnings results premarket, shares of GameStop (GME) are now up almost 5%. The day’s trading chart looks like this:
FactSet(Click for a larger version.)
What could explain the upward move despite the full-year guidance that came in well below Wall Street estimates?
Well, the charitable view would be that GameStop’s argument that sales will pick up once blockbuster games and new consoles are released later in the year is driving enthusiasm:
“The first half of the year is going to be very challenging because we’re continuing the trend that we have seen in the last two or three months on sales of hardware from the current console set and sales of software,” Chief Financial Officer Robert Lloyd said in an interview…
The videogame industry is anticipating a strong finish to 2013 with the release of Take-Two Interactive Software’s “Grand Theft Auto V,” Electronic Arts Inc’s “Battlefield 4″ and at least one next-generation console by the holidays.
As a result, consumers are postponing purchases until the fourth-quarter console introductions.
“But we expect to return to growth in the back half of the year,” Lloyd said.
On the other hand it’s worth noting that, according to Yahoo Finance, 51% of GameStop’s float was held by short sellers as of Feb. 28.
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