Games Workshop’s stocks are still sliding, but there may be bigger dangers ahead in 2019 that were outlined by experts over two years ago.
UPDATE: As of COB Friday morning Oct 19, GW’s stock had dropped below the $40 a share mark, down $13 since Kirby’s sell-off.
GW may be on the leading edge of a financial challenge that was seemingly brought on by their ex-CED selling off a large portion of his stock, that may have triggered a market slide for them.
However, after remarks by their current CEO, Kevin Roundtree in their August 2017-18 financial report, and their market warning less than a week ago, storm clouds may indeed be ahead for the modelmakers from Nottingham.
Tom Kirby
Let’s take a look at everything that’s been going on since their summer financial update, and what a key financial analyst had to say about GW back in 2016.
4 Big Problems To GW’s Continued Growth & Success
GW’s Sales have been Growing
In the past year, the market has seen an unprecedented amount of success in Games Workshop’s sales. They’ve been so successful that they even gave a £5 million bonus spread across every job under the company.
However, Richard Roundtree, Games Workshop’s current CEO cautioned back in July it would be foolish to expect this steady rise in growth for long.
“…It would be unrealistic, if not daft, of me to promise that we can continue to grow at the rates we have reported over the last two years. I am not, however, planning to scale down our ambitions, I am just informing you of the back drop.”
After seeing a steady sales increase in the company for the past year, Richard Roundtree warned people of a potential slowdown to come in the near future.
As we’ve said before, Tom Kirby is the ex-CEO of Games Workshop, yet still holds a hefty amount of shares in the company. He recently sold off about 1.7% of his share equating to £20 million, after the market showed a steady increase value since Roundtree assumed the reins as CEO.
The stake represents 1.7% of Games Workshop, although Kirby still owns 4.8% of the business and is subject to a 180 day lock-up on the remaining shares.
Tom Kirby’s disposal may have caused the shares to fall by nearly 5% to £37.67 after a spectacular run…
Nealy 20 days later the slide has continued, and yesterday Games Workshop themselves issued an ominious warning:
Starting back in 2016, you can see a steady trend of an increase in sales and profit. As the chart moves well into 2018, you can see a significant drop almost overnight (even though it was about 20 days in the making).
Just like that, a decent sized decrease in stock value has hit Games Workshop.
Back in 2016 financial anyalst Richard Beddard outlined some key points to the continued success of GW. Over two years later, as stocks start to slide, these points may be more important than ever before.
Ignoring threats
The core customers are modellers who may never play the game.
But I’m not confident about Games Workshop and the reason isn’t, specifically, one of the putative challenges put up by naysayers over the years: (It is the following?):
- the emergence of competing model and game designers,
- videogames,
- the availability of counterfeit models on the Internet,
- or the possibility that in future modellers might print their own miniatures using 3D printers.
The question is, what’s next for the future of Games Workshop? Will stock value go up as more people jump on board of what was just sold? Or will it continue to drop despite new releases and efforts of the company?
If the latter happens, the bigger question may be what will GW stop supporting, hobby wise, to help keep costs under control going into 2019?
Let us know in the comments of our Facebook Hobby Group.
About the Author: Rob Baer
Rob Baer
Job Title: Managing Editor
Founded Spikey Bits in 2009
Socials: Rob Baer on Facebook and @catdaddymbg on X
About Rob Baer: Founder, Publisher, & Managing Editor of Spikey Bits, the leading tabletop gaming news website focused on the hobby side of wargaming and miniatures.
Rob also co-founded and currently hosts the Long War Podcast, which has over 350 episodes and focuses on tabletop miniatures gaming, specializing in Warhammer 40k. and spent six years writing for Bell of Lost Souls.
Every year, along with his co-hosts, he helps host the Long War 40k Doubles Tournament at Adepticon and the Long War 40k Doubles at the Las Vegas Open, each of which attracts thousands of players from around the world.
Rob has won many Warhammer 40k Tournaments over the years, including multiple first-place finishes in Warhammer 40k Grand Tournaments over the years and even winning 1st place at the 2011 Adepticon 40k Team Tournament. He was even featured for his painting in issue #304 of Games Workshop’s White Dwarf Magazine.
With over 30 years of experience in retail and distribution, Rob knows all the products and exactly which ones are the best. As a member of GAMA (Game Manufacturers Association), he advocates for gaming stores and manufacturers in these difficult times, always looking for the next big thing to feature for the miniatures hobby, helping everyone to provide the value consumers want.
While he’s played every edition of Warhammer 40k and Warhammer Fantasy (since 5th Edition) and has been hobbying on miniatures since the 1980s, Titans of all sizes will always be his favorite! It’s even rumored that his hobby vault rivals the Solemnance Galleries, containing rulebooks filled with lore from editions long past, ancient packs of black-bordered Magic Cards, and models made of both pewter and resin.
