30 million shelf offering( management was betting on a much better zynga ipo)
quick hit ( have to pay for the license)
they can't keep livingof zumba ( people move on something better and never will come out)
they get a fraction of the european sales ( they could not afford and was not willing to take the gamble to bring it to market in europe by them self)
streaming games in online will be the further ( cool in lacking way behind on that)
This quarter is never their best quarter( 4 quarter is)
glty i gave you warning yesterday you can either listen or not but i am right
Shelf offering is a strength of a company as it grants them easier access to capital. They have no need to sell any shares as they have substantial positive cash flow over the past year.
There are licensing fees with the NFL, but this is a very minor event in the grand scheme of Majesco. Regardless, the team they acquired with Quick Hit is a huge strength going forward. Without doubt they are working on other projects - wouldn't surprise me if they make an announcement of such in the CC.
Zumba is such a cash cow right now that they won't have to live off Zumba. they can take the profits and dedicate them to pursuing other more sophisticated games. Whether you think Zumba is a fad or not, the end of the life cycle for these games is years down the road. Zumba 1 and 2 are still best sellers at amazon, walmart.com, bestbuy.com, target and others. We should get presale figures released tomorrow for Zumba Rush to see how that is doing.
They get a fraction of the sale from Europe - THAT'S THE BEST PART! There are virtually no costs associated with those sales. In Q3 Majesco earned $2.5M in royalty revenue from those sales, or roughly $5 per game. I would estimate that 50% or better flows straight to the bottom line. I expect royalty revenues to be $10M+ for Q1. AND get this, all development costs associated with Zumba were amortized over a 12 month period, so any copies sold since november will have substantially higher gross profit margins. What I'm getting at is expect very very healthy profit margins at Q1.
This brings me to your next comment. Yes, Q4 will be lackluster. However, they will issue guidance with certainty for Q1 (the quarters almost over anyway) and the numbers should be great. Sales will be up YOY but more importantly profits will be substantially higher compared with Q1 2011. Also keep in mind that Majesco books their revenue much earlier than when the video game leaves the shelf of your local best buy, so we could even see a beat in Q4 as the holiday ramp up from retailers may have started early.
Streaming games is what they are working on with their new development team. I would bet they have more downloadable games, like bloodrayne, in the pipeline.
The daily movement is simply the stock being what it is, a microcap stock that is simple to take advantage of. Stocks never go up in a straight line and eventually fundamentals will win out.
sly- speaking of streaming games, I own DSNY.OB Destiny Media which has developed "clipstream" for streaming digital video media which does not require transcoding. check it out. let me know what you think.