Michael Burry's GameStop plummets on weak business prospects

<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "GameStop Corp. Shares (NYSE: GME), a company that "The Big Short" investor Michael Burry (crafts, Wallet) urged to complete its repurchase of $ 237.6 million shares in August, plunged into the aftermarket of spare parts, the company offering lower comparative sales forecast for the second half of 2019. "data-reactid =" 11 "> Shares of GameStop Corp. (NYSE: GME), a company that Michael Burry (Trades, Portfolio), investor in" The Big Short "- urged to complete its share buyback $ 237.6 million in August plunged into the aftermarket segment, with the company offering lower comparable sales guidance for the second half of 2019.

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "For the three-month period ended August 3rd, the Grapevine, a Texas-based company, reported net loss $ 415.3 million, or $ 4.15 in loss per share, compared to a net loss of $ 24.9 million, or 24 cents per share, in the prior year quarter. "data-reactid =" 12 "> For the quarter ended Aug. 3, Grapevine, Texas, reported a net loss of $ 415.3 million, or a loss of $ 4.15 per share, compared to a net loss of $ 24.9 million, or a loss of 24 cents per share, in the corresponding quarter of the prior year.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The company records a decline in sales and a larger net loss"data-reactid =" 26 ">The company records a decline in sales and a larger net loss

GameStop CFO Jim Bell said that while sales declines in the quarter are "consistent" with historical trends towards the end of the hardware cycle, total net global sales of $ 1.286 billion decreased by approximately 14.35% compared to sales in the second quarter of 2018, which amounted to $ 1.501. billion. Comparable sales decreased 11.6% during the quarter, which is worse than the 10.3% decline recorded on May 3rd.

<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The net loss is based on generally accepted accounting principles depreciation $ 400.9 million, or $ 3.82 per diluted share, mainly related to the impairment of Good will. Excluding the impairment charge and other items, the adjusted net loss of 32 cents per share remains below the consensus estimate of 22 cents per share. "Data-reactid =" 41 "> The net loss calculated in accordance with generally accepted accounting principles includes asset impairment charges of $ 400.9 million, or $ 3.82 per diluted share, mainly related to the impairment of goodwill. (Excluding the impairment charge and other items), the adjusted net loss of 32 cents per share remained below the consensus estimate of 22 cents per share.

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After recording a decline in sales in the last two quarters, management expects that comparable sales for the full year 2019 will decrease during the period of low adolescence, which is even worse by compared to previous forecasts, which predicted a decline of 5% to 10%.

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After terminating its dividend on June 3, GameStop finalized a modified Dutch bid to acquire 12 million common shares at $ 5.20 for a total cost of $ 62.4 million, expenses and expenses excluded. The company, which still has approximately $ 237 million in its existing share repurchase authorization, reduced its long-term debt to $ 419.1 million, down $ 49.8 million from the first quarter, which brings the net repayment of debt to 401.7 million USD since the beginning of the year.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Shares collapse in the aftermarket, Burry expresses its concerns"data-reactid =" 71 ">Shares collapse in the aftermarket, Burry expresses its concerns

Although the shares closed at $ 5.09, up about 6.93% from the $ 4.76 closing at Monday's close, GameStop's shares fell by more than 15 percent. % in transactions in the aftermarket. At around $ 4.30 per share, the stock trades at $ 1.15 on $ 3.15, its lowest level in 52 weeks, and at $ 1 based on the 3-point valuation. , $ 30 of the minimum price over 10 years.

Known for his investment in the "Big Short" before the 2008 financial crisis, Burry said in a letter to GameStop's board of directors that his company, Scion Asset Management, had adopted an activist stance worth $ 2.75 million. shares and lobbied for the company to complete the remaining share repurchase of $ 237.6 million with available cash. Burry estimated that GameStop had over $ 480 million in cash, which is enough to complete the repurchase of shares while allowing to invest in the business and repay its debt.

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