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Michael Pachter, Wedbush Securities managing director, on why he is advising investors look at GameStop, despite a shift away from traditional console...
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I was sad about games out and -- -- Hasbro all shout out share sir have seventeen dollars and 38 cents right now off the 52 week allow him.
The reporting tomorrow morning.
Our next guest says the stock is cheap and has a 33 dollar twelve month price target for the video gaming -- Joining us now Michael -- web bush securities analyst.
Okay says so there's been shifted tablets and mobile phones away from gaming consoles the company's already said -- -- sales are down.
And you still say the stock is cheap and -- higher.
I do you know this shift is not their core customer.
Nintendo did the world a favor by expanding the market with the hand -- with the DS.
And by expanding the market with the -- to you know older people women in a nontraditional gamers.
Those are the ones who were moving over to tablet games mobile game so the hand held guys are abandoning that the dedicated hand held.
And we players -- the ones playing social gains.
The hardcore guy that the call of duty multiplayer player and I'm sure your audience has -- -- plenty -- teenage kids at home play call of duty ten hours a week or more than they go to GameStop.
And and call of duty is getting bigger so that console market has grown dramatically the last ten years.
Game -- customer base has grown dramatically.
And the only real bear case for GameStop is that that some people on Wall Street believe.
That disks are going away that everything's going to be a download that's just not happening and the publishers have no interest in that the console manufacturers that have no interest.
Not about Harrison that said they did the disk is going away because it's gone away in -- movie like -- movie world.
It's gone away basically in music land it's only natural that it's gonna go way the video game world to and you -- -- -- artists should keep profits up.
At the risk of offending you.
-- you can't CD sales the CD sales are down 70%.
Since 1997.
Which is Napster Crocs are Kazaa -- and we've had the iPod which is ubiquitous everybody has a CD -- -- drive in their PC.
And the music industry still sold 30% as many see these last years they did 97 so the CB hasn't gone away.
The dvd CD sales are down by 50%.
Great.
They still only sold ten billion dollars worth they sold a billion dvds in the US last year hardly gone.
So no games are going away and -- and I music and movies are gone but.
And there are downloading things are people are certainly downloading thing absolutely downgraded six ways till Tuesday.
What do you expecting tomorrow morning.
-- they'll probably print a penny or two above above.
Consensus they'll probably lower there their guidance for the year by a dime so they're only gonna grow somewhere between five and 15%.
They're only gonna make three bucks they -- three bucks a cash.
And they -- it's actually so they're trading at about a -- a -- multiple we'll see in my house Michael factor of Webber securities.
Thank you -- right we have some breaking news -- at CNN confirming.
That the attorney general -- says sent subpoenas to several banks including.
JPMorgan UBS and Deutsche Bank Royal Bank of Scotland Barclays over the -- scandal so Elizabeth MacDonald calls on this story following it throughout the rest of the often end -- that news just breaking.
A subpoenas to several banks over the.
