Gavekal Capital: GameStop Plunges On Lower 4Q Guidance

Tuesday, January 14, 2014

GameStop Plunges On Lower 4Q Guidance

GameStop (GME) is down over 18% so far today. The company moved 4Q EPS guidance from $1.97-$2.14 to $1.85-$1.95. This news has sent the stock down as it seemed most analysts believed they would be able to meet the top end of the initial estimate. Sales during the holiday period were actually stronger than expectations as sales were up over 10% year-over-year for stores that have been open at least a year. If GME closes down around current levels, this would take the stock almost exactly to the uptrend line in our point and figure chart below. Will that provide support for GME? Time will tell.

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