Monday, April 18, 2005

Hit #39

Gamestop announced today that it is buying rival Electronics Boutique (ELBO) in a cash/stock deal valuing ELBO at $55/share, a 35% premium over its recent price.

This offer price is a 124% premium over my cost/share of $24.51.

Both Gamestop and Elecronics Boutique were takeover candidates for the likes of Blockbuster or Best Buy. I did not expect them to merge, especially with such a huge premium involved. The market has definitely voted for this deal - with even the acquirer's stock moving up considerably.

I do not own Gamestop stock, since it always seemed expensive. But I will be keeping the shares I get as part of this deal, since the game retailing industry has a few more years of growth ahead.

5 Comments:

At 3:11 PM, Anonymous Liz L. said...

Just discovered your blog, and am very impressed. Most educational for those of us trying to make our way around the stock market profitably.

 
At 12:05 AM, Anonymous Guru said...

Liz, thanks for the encouraging words. Do let me know how I can make this blog more useful/readable. You got a blog of your own ? Any notes on your investing experience that you would share ?

 
At 10:58 AM, Anonymous Liz L. said...

The only thing I can think of asking for is: details about your decision-making. I'm very interested in how you do research to find potential buys. I'm not blogging yet, but I do spend most of my day reading blogs and looking at charts, trying to decide what to do next. (I used to be a magazine editor. As I grew to hate that business, my husband - a computer programmer - suggested that we see if spending my time investing our not-all-that-vast capital was more cost-effective. So I'm a beginner, although one who is working at investing full-time, which I suppose is odd.)

 
At 7:49 PM, Anonymous Guru said...

Liz,
I would suggest going over some of my initial posts. I have listed a series of simple thresholds that I need to see before something moves into a buy list.
I would still consider patience and infrequent trading as essential requirements. You may have an advantage there - studies have shown repeatedly that women get better returns just because they trade less often thus not enriching the broker :-)
I will also try to list, in an upcoming post, a set of potential targets that I own and that have not yet been acquired.
Take a look at what Sharebuilder (www.sharebuilder.com) and Folio (www.foliofn.com) have to offer ( I don't have any relationship with them except for owning accounts there).
A request - since you have already admitted that you have time ;-) - I would appreciate any feedback you have starting from my earliest posts. I am sure that the reading will help you in return.

 
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