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Majesco Entertainment Co. Message Board

  • geekcomputing geekcomputing Jul 7, 2006 3:03 PM Flag

    Logical arguements for cool.

    only problem w/ your hyping is your assuming cool as assets w/ intrinsic value.

    Im not saying a buyout is not possible but lets face it.

    1st off cool management owns 25% of the stock according to the sec. (35% if you ask investor relations... which is not a good sign if IR doesnt know how much mgt owns but anyway.)

    so if any buyout were to occur mgt would have to approve of it.

    if you read the 10Q you know this is unlikely b/c mgt has already rejected funding by ellin 3 times in a row. The first time he offered them a 20% premium at that!

    so w/o some fat severance pay mgt is sticking around. also its family owned... this is their baby.. they are entrenched.

    Members of the board of directors also have business deals w/ the company. You can bet they want to keep the money and the deals flowing so i doubt they will just step down from the board. Seems like a conflict of interest to me as a board is supposed to be independent but what ever.

    next you have to look at what valuable assets cool has.. which are few. They only own the IP on advent rising and blood rayne. big deal, yawn.

    next check out how close they are to getting delisted again. 3.6 million in equity and they will hit non-compliance at 2.5 million.

    they only missed non-compliance last time since they sold off a bunch of assets , otherwise they would have taken a nasty loss.

    now if we take 22.37 million shares and multiply it by the estimated loss per shares of -.12 cents we get (drum roll please)

    negative -2.6480 million.

    lets just assume they bet earnings by 50% you still get a loss of -1.3240 million

    Then factor in the lost lawsuit of which we still have to pay out 550k. yummy.

    then factor in 2 major other on going lawsuits 1 of which they are being sued for 1.9 million bucks and add in lawyers fees. yummy

    and the other is suing the company and the 3 family members among a list of others. yummy

    this is nice as well.
    As of April 30, 2006, there was approximately $0.9 million of unrecognized compensation cost related to non-vested stock option awards, which is expected to be recognized over a remaining weighted-average vesting period of two years.

    aka kill 900,000 of cash goodbye in the next 2 years.

    now if all this is so bad then why am i here. Simply put i am a investor and thus i research. So far Cool is showing me few reasons to get in.

    management is simply horrible.

    and 2 reverse splits... wow!

    A buyout could occur but i doubt it.

    few would want cool since it lacks ip and if anyone did they could simply wait for them to go belly up and purchase 1 of the 2 Ip's from the creditors at a discount.

    What i think will occur is Ellin will continue to buy when the prices are right and eventually fight his way on the board and install 2 directors via a stockholders vote. This is the best thing that could happen i think as cool performance has been miserable in the past.. heck could they manage to do a worse job? doubtful.

    If i am wrong then contrats to you.

    I feel though the market offers much safer stocks w/ superior returns compared to cool. Yet, i do enjoy watching them. Maybe when next quarters earnings implosion happens and people get level headed then i might pick up a few hundred shares at the cheap if i see any positive reason 2. Then again , i might be wrong and ellin will take the stock up. who knows but from a fundamental stand point ill just watch for a while.

    So far i have seen no arguement for reasons for a logical buyout other than just pumpers and hypers doing their best to justify an inflated price relative to horrible earnings.

    Its all quite amusing and entertaining.

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