GameStop stock drops 13% following Amazon trade-in program announcement

by Dustin Burg on Mar 5th 2009 8:20PM

Even though GameStop's CEO is confident that Amazon.com's plan to enter the used video game market won't be successful, it appears GameStop investors aren't as optimistic. Shares of the company dove 13% on Thursday, ending the trading day $3.54 lower.

Variety reports that Amazon.com's used game ambitions (and to a much lesser extent, Toys 'R' Us' plans) worried investors today, causing a huge GameStop stock sell-off. Used game sales account for 44% of GameStop's gross profit and having Amazon as a competitor in one of its most lucrative operations just doesn't bode well for its stock price. As far as we're concerned, competition among businesses is always good.

Shares of Amazon stock seem to be unaffected by today's news.

Source

Tags: amazon, amazon.com, gamestop, trade-in

Reader Comments (57)

The markets are so fickle these days. Yeesh.

They aren't fickle. Market movements, whether broad based or an individual company, are general opinions of the long-term health of the company in question. A day to day hiccup may cause a stock move, but it will be right back up there the next day. Tomorrow's movement of GameStop shares will tell us a lot about what investors actually feel about the Amazon move. Personally, I think it'll stay down for a while until we see if Amazon makes their trade program work or not.

When the markets drop that means that investors think that the long term profitability of the economy as a whole has severely dropped. Take note of that and see exactly what happened before the move, you can tell what factors will have a positive or negative long term impact on a company or whole markets.

Honestly, check out http://www.google.com/finance?client=ob&q=NYSE:GME and hit the button to change it to a 3 month span, 6 mos, etc. John is right the markets are fickle, and can change on a whim and rebound in the same span. Looking at the span of only a couple days, with the horizontal axis measuring 22 - 28 of course it's going to make it visually appear as if the company just nosedived into oblivion.

Get a better perspective. Laughing Target I can tell this is your fascinating pet hobby for you, but tomorrow's move of GME shares WILL NOT be a decent barometer of what investors really feel about Amazon's move. At. All. Putting on your academia hat and stuffing a lot of words into a few posts doesn't make it so.

At least it doesn't look like this for godssakes :P http://www.google.com/finance?client=ob&q=AMEX:MCZ

Fickle - changing often and suddenly. I guess volatile would also be appropriate.

Markez,

Do you know if Madworld has online multiplayer?

Don't think it will, could be wrong. Seem to recall the fella heading up the project was emphatic a single player campaign was the sole focus but that they 'might' include some online functionality, doubt it'd be multiplayer. I dunno how hyped I am on this game, probably wait awhile to see what people think once it launches.

I'm sure when SamFish sleeps at night he dreams that it has the most online robust multiplayer of any game ever released. His other dreams are just inappropriate xD

he he he ...

I'm kind of in the same boat. It's weird because one day I'll be pumped and the next day I think it looks shallow. Probably have to check the reviews and hands on from others on this site. It just seems after you murder everyone in every way possible the initial shock factor might wear off. ya know? No multiplayer isn't a big deal to me but it seems like a natural fit with this game in particular. Maybe we get it in a sequel if it's well received. I'm also flip flopping on RE5 lately. I went from hating the demo to remembering how good mercenaries was in RE4. I bought that Matt Hazard game today and so far it's pretty awesome.

Yeap... panking over the fact that people will have to pay to send their used games to amazon.. yay.

The moon is made of cheese.

"Hurry! Sell all Earth cheese stocks and buy Moon."

What....?

No Independence Day Pic?

I know right? They should've posted a pic of the Alien mothership exploding.

brilliant!

I was actually expecting a graphic from CounterStrike or COD4, with BOOM HEADSHOT!! in big bold letters underneath.

Owned.

Now if I actually had a job, I'll get a credit card and shop at Amazon.

Finally, they might be forced to either pay out more for used games or charge less for buying them.

They better charge less. Charging 18$ (atleast where I live) for a used God of War 2 when a new copy is ridiculous.

**when a new copy is 20$ is a bit ridiculous

Who owns stocks these days?

Just like David Letterman said...

The Wall Street is at a dead end.

If you have any sort of company sponsored retirement fund, you have stock. If your state has a retirement fund, you have stock. Equity markets are the backbone for the retirement funds, college funds, your money market account at the bank and a host of other things over a hundred millions of people in America and hundreds of millions worldwide rely on for funding daily and future expenses.

So, most people living in societies that can afford to get on the internet are heavily impacted by equity markets. It's a good idea not to piss them off because whether you'll retire with some semblance of comfort or die in a ditch somewhere is up to the health of the economic system, which is reflected by Wall Street.

Main Street is tied to Wall Street. There isn't a division between the two. When one fails, so does the other.

I'm looking forward to a used game bidding war.

Won't happen. The whole Gamestop model is training the public to eat shit and like it. Giving a good deal is totally alien concept to them, as that would eat into their profits and put ideas into their customers heads that they can expect this sort of thing all the time.

Consumers are smarter than that. Not terribly bright, but GameStop will lose business if Amazon undercuts their prices and/or buys for more. It's the nature of competition. That's why there isn't an EB or Software Etc anymore, just GameStop. GS did the job better, the other two (which had the same buy-back programs) failed to keep up. The only way a person will "eat it and like it" is if some central leader who has the full force of a military backing them decides on it. GameStop doesn't have that kind of power.

Anecdotal point - I haven't stepped foot in a GameStop in nearly a year. The local game shop gives me more money for my trades and cheaper prices on the games. Why waste money at GameStop when these guys give me a better bang for my buck?

just wondering, since i live in Canada, but does Amazon actually have a retail store or is it all internet cause I personally dont like using my credit card over the internet.

It's all internet

well they have employment offices. thats all i see in my part of town.
but people i know have mentioned amazon retail stores.
i wouldn't be surprised.

Actually, you couldn't use the internet at all. Hackers (on steroids) can READ YOUR MIND!

they have a store around me where u can take ur shit and they will sell it on amazon and take like 5% or something small like that.

Did someone secretly replace investors with hypercaffeinated chihuahaus as a joke?

I fear what will happen tomorrow morning when the CEO of General Electric has cornflakes for breakfast instead of Special K.

Why the hell didn't this happen like 5 years ago?

I'd actually say that Amazon had a relatively good day, given that the Dow and S&P both fell around 4% today.

I've been interested in Goozex after hearing people talk about it. I just want to make sure I understand the process. Twilight Princess and GTA4 are both worth 650 points. Is that the trade in value AND point cost for those games? Can I trade one for the other, only having to pay Goozex $1 + shipping? If so, that's a fucking sweet deal. I'll refer someone when I make my account if someone can clear this up for me. Thanks.

Oh and..you had it coming Gamestop. Now what have you learned?

ive been using it for about 3 months and have nothing but great things to say about it. i HIGHLY recommend it

Is my assertion correct? I'd much rather my fellow gamers benefit from trade-ins than GS. I'll refer whoever can answer.

I'll explain from experience, the problem with it, for the most part you might never, ever get the game you want, there's long waiting list on the actual games you may want. Goozex is kind of a hit or miss on the game you want. I stoped using it for a while now, so not sure if it's gotten any better. Doubt it though, since it's player based. The popular titles will always be in high in demand. Now if you're looking for Hello Kitty for your little sister, you're good to go champ. No ref me before I rape you. JK JK!

Cesaria - Seriously, Skyflur brings up a point I'd forgotten, but heard about when I looked at this a year ago. Fact is, there's been a handful of folks over the last two days talking about how GREAT GOOZEX IS OH MY GOD and seriously other than this guy here, they all sound like absolute and utter PR bots, and I'm beginning to think it's actually a possibility. Seriously, they've come out of the absolute woodwork the last few days.

DIE DIE DIE!!! Dear sweet Satan,

Please make downloaded games a reality so this filthy pawn shop may be put to sleep. (much like their customer service)

Or maybe they're down because everything is down? The major indexes were all down 4+% and some companies were just hit harder than others.

As long as it's Gamestop, who cares?

Because Gamestop is "too big to fail".
/sarcasm

Used game sales competition is good, hooray for Amazon doing it instead of some small box like EB games.

EBGames = GameStop so that wouldn't work anyway. There are other stores that sell and accept used games. One of which is getting somewhat big and that would be GameCrazy

Wow, does that mean my store credit dropped by that same amount? Dang, better go spend more money at gamestop. Oh wait, didn't want anybody to know that... Crap.

*insert TF2 Engineer laugh here,hell any Engineer taunt will do.

"Spah sappin' mah 'stop-stocks!"

sounds like it could work out too. get even cheaper used games online than in store. i dont know the extent of deal. but

Gamestop's horrible trade in offers have inspired me to keep ALL of my games, shitty or not.

Me too, but that ends tomorrow. Time to shed some of this trash!

Yeah, I used to work for a little shop in LA that is similar to Gamestop back in the mid 90s....total profit the way they buy games for cheap! But I can't believe how Amzon's announcement can make such a big impact.

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GameStop stock drops 13% following Amazon trade-in program announcement

Reader Comments (57)

Posted: Mar 5th 2009 8:22PM Johnnynumber5 is powered by cell said

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