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SHFL entertainment, AŞ Message Board

  • kbloisab2 kbloisab2 Mar 3, 2007 2:56 PM Flag


    Shfl is now down over 50% from the high, and some novice investors might buy for that reason.Don't be tempted-- a quick in and out play might provide profits, but the fundementals of Shfl are so bad the stock has no way to go but down.

    The basics finances of Shfl are so bad it virtualy defies believe that any one would pay about $20 for this stock, when at best its reasonable value is in the $3.75 range.

    For example,the Balance Sheet shows assets of $306,000,000.00.However $180,000,000.00 [ i.e. 59% ] of the $306,000,000.00 is for so called " Goodwill" and " Intangable Assets ". In other words smoke and mirror assets.

    Deducting the smoke and mirror assets shows that Shfl has only $180,000,000.00 in assets rather than the $306,000,000.00 it claims.

    Additionally, Shfl's balance sheet shows the company has a NEGATIVE value of $136,000,000.00, whereas even at $20 a share, the stock price values the company at about $700,000,000. That provides a price disconnect of $836,000,000.00 [i.e $136M + $700M ]

    In other words, the long share holders are prepared to pay $700M for a company that is worth MINUS $136M.

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    • Clorox has a market cap of about $9.5 billion and this balance sheet:

      Your opinion?

      • 1 Reply to pjv2xyw9dww4b5
      • PJ -- Goodwill etc, if used properly is a reasonable way to account for payments in excess of value recieved.
        The theory being that over time, the buyer will recieve profits from the assets it purchased, from either future new business, and/or expansion profits of the existing business.

        Drug companies that have taken over other drug companies usually have high goodwill etc on their balance sheets.

        Goodwill etc, however, is very easy to abuse--an asset with essentially no value [read Stargames] can be shown on the balance sheet as having great value.The value of goodwill etc, is set by management, and therefore,it is an opinion rather than a fact.Opinions are usually skewed to reflect the best possible values.

        Shfl grossly over paid 25 times net earnings for Stargames at $115M [inlcuding all fees]. Since the purchase date Staregames has proven to be a huge loser--a strict accounting of all costs [ legal fees, interest,operating loses,sale of valuable RDIF patents needed to pay for Stargames, etc, etc,] would put Stargames price to date approaching $200M.Stargames will never return the purchase price, let alone a profit on the $200M invested to date.

        Stargames was a small start up company in Australia. It had limited, if any, trade name recognitation and no long term business reputation. Therefore,Stargames lacked the attributes needed for valid goodwill etc. asset recognition.

        Reasonable accouting methods in such situations requires the excess price paid for Stargames to be written off as a lose. Therefore, in our evaluation of Shfl's balance sheet, we have placed ZERO value on the $180M shown as Goodwill and Intangible Assets.These are clearly smoke and mirror type assets.

    • Clorox has a market cap of about $9.5 billion and this balance sheet:

      Your opinion?