GameStop 'has zero terminal value,' says Benchmark
Benchmark analyst Mike Hickey said he was not surprised that GameStop reduced its FY18 earnings view and free cash flow guidance given the weaker than anticipated new/used software sales, higher promotional expenses and a mix shift towards lower margin hardware sales evidenced in its Q3 report. The company appears "lost at sea" and its management team "lacks investor credibility," said Hickey, who believes GameStop "has zero terminal value." He sees the "Hail Mary" effort to sell the remainder of the company running up against "limited reasonable financial outcomes that would encourage a potential bid," Hickey added. The analyst keeps a Sell rating on GameStop shares and lowered his price target on the stock to $9 from $10.