GameStop (NYSE: GME ) is no longer playing a game of denial. After several quarters of buying its way out of earnings-per-share disappointments by snapping up gobs of its outstanding shares, the video-game retailer is finally hosing down its profit guidance.
It was inevitable. The sale of physical games has been gradually declining for three years. GameStop has talked down its store-level comps several times over the past year but kept its profitability outlook -- on a per-share basis -- intact. Well, the model has finally disintegrated to the point where it can't play the stock-buyback game any longer.
GameStop is trying. The company has made acquisitions to have some skin in digital distribution. A loyalty-shopper program is keeping its store-level declines from falling as quickly as the industry itself.
Capitulation doesn't come with a reset button, but GameStop isn't going down without a fight.
Briefly in the news
And now let's take a quick look at some of the other stories that shaped our week.
- Shares of NetEase (Nasdaq: NTES ) hit a 52-week high after posting better-than-expected quarterly results. Yes, there are Chinese dot-coms out there hitting new highs. Well, OK, there's this one.
- Comcast (Nasdaq: CMCSA ) is raising the ceiling for its broadband customers. The company's previous 250 gigabyte monthly cap will now be "at least" 300 gigs per month. I've been cynical about Comcast since the cap kicked in, but at least it's taking a step in the right direction this time.
- Sirius XM Radio (Nasdaq: SIRI ) fell below $2 for the first in more than four months. Is it too late to turn the satellite-radio service into a social network? Don't worry. Sirius XM should bounce back.
- Oh, that's right. Facebook (Nasdaq: FB ) finally went public. The IPO priced at $38, tagging the stock with a $104 billion valuation before Mr. Market took over on Friday.
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