Video games revisited

A year or so ago I mused on Kids these days and the numbers behind the video game industry. There's this company Gamestop (NYSE - GME). They have stores around the country selling videogames. Back then, in March 2005 it was trading around $20. Now it's up to almost $47. Just out of curiosity, I went to have a look at what has changed in between, other than the stock price...

Cash then: $205mm Now: $171mm
Book value then: $594mm Now: $543mm
LTM Revs then: $1.6bn Now: $1.8bn
Op Inc then: $$104mm Now: $99mm

So they've got less cash, less book value, revenues a little higher but less income... and the stock has more than doubled. Hmmmm.

There's about 73mm shares out, LTM earnings per share are $1.61, and analysts seem to be estimating around $1.90 a share in 2006.

No wonder people have trouble understanding the stock market.

It reminds me a bit of the video rental stores, like Blockbuster, Hollywood Entertainment and Movie Gallery. They have basically one product. And in the long run, everybody is going to get that product over the wire (downloading from the web).

Plus it's a Texan company.

Short! Short!