As some know, I am a fairly religious viewer of Mad Money. It's an investing/stock show on CNBC put on by Jim Cramer. I usually watch the show to get ideas, since I won't ever just act on a recommendation without first doing my own research. One of the recommendations I heard a couple months ago was for GameStop (GME). Cramer made the recommendation based on the fact they are a good company but most importantly because they were going to be one of the Microsoft Xbox 360 retailers.

Anyways, I had looked into the stock, and decided against buying it. Seeing now that the demand for the Xbox 360 is so high, I thought I might have made a mistake. However, today, I read that while demand is high, GameStop has already sold their their inventory. The problem is that there is also limited supplies for the console over the next few weeks. Because of this GameStop is only forecasting an Q4 sales growth between 0% - 2%.

This can't be good, especially after their Q3 earnings, which were released on November 29th. The 10 analysts that were surveyed predicted an average gain of $0.14 per share, however they ended up reporting a loss of $0.04 per share. The loss wasn't related to how their sales went though, but rather their merger with Electronics Boutique. Before they reported their Q3 earnings, analysts were predicting a gain of $1.02 per share in Q4 (60% of their expected earnings for the year). With this recent development, it will be interesting to see how this plays out. Bottom line, I'm still glad I didn't buy. Maybe I will though in Q1 2006; they ARE a good company, just looks like they hit a rough patch.