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Shanda Games Limited (GAME) Message Board

  • stockguru963 stockguru963 Oct 7, 2009 3:22 PM Flag

    FairValue for GAME is around $8.4

    -By fgq2

    Before the IPO of Game, SNDA was traded at $57 with 66.77M shares on Sep. 24, so the market cap was: 3.8B, which includes 100% GAME, 1.4B cash and other content business value, here we do not consider the cash value here. If we consider the content business, the GAME value will be less..

    So the 100% GAME is worth 3.8B-1.4B=2.4B.

    After IPO of GAME, SNDA own 71% of GAME now. And the public has 29% of GAME.

    2.4B X 29% =0.7B. which is corresponding the 83.5M shares, so for each share $8.4.

    Reference:

    1. http://seekingalpha.com/article/163586-s...

    2. http://www.google.com/finance?q=snda


    Reversely from GAME and SNDA price today

    We can roughly get :

    $11.3 x 83.5M =0.944B for GAME Public IPO

    $50 x 66.77M = 3.34B from SNDA

    So the total is 4.284B.

    This is 0.484B more than 3.8B for SNDA on Sep. 24.

    It means there is nothing new, but with this IPO, they generate 0.484B new money.

    http://messages.finance.yahoo.com/Stocks_(A_to_Z)/Stocks_S/threadview?m=tm&bn=25737&tid=58540&mid=58540&tof=33&frt=2

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    • I will wait and get in at 8.41

      • 1 Reply to qianfushan
      • If you can get in at 8.41, it is not because your assumptions and calculations are correct, but it is due to random statistical probability. Thus, yes, it is possible.

        However, your chance of getting in at 8.41 is as good as my chance of selling my shares at 16 in an intermediate term. In a longer term, my chance of selling my shares at 30-40 is as good as your chance of getting in at 8.41.

        In the final analysis, statistically speaking, yes, it is possible that you can get in at 8.41; from one trader to another, you better have a lot patience; theoretically speaking, maybe possible; philosophically speaking, we will wait and see; religiously speaking, you better pray; medically speaking, don't hold your breath, no matter what happens; psychologically speaking, if it doesn't happen, seek counseling; emotionally speaking, take some Xanax and call the crisis hotline.

        If you come up with a breakthrough theory on "how to predict the price movements of IPOs," call the publisher.

        Hangman,

    • LOL, GS is going to offer you a job-IPO expert officer. You can't just develop a formula & conclude a number as IPO fair value. There are much more variables to generate an IPO value. The reason that GAME tanks was due to the poor momentum in the hedge funds, they felt there are more money can be made in other sectors. For now, we need GS or other underwriters to initiate covering, hopefully an initial of "BUY" or "Overweight" will do.

      Please do not mislead retail investors to satisfy your shorty greedy mind.

    • Even if fair value truly is 8.4, a hugely profitable leader in a growing industry with huge growth potential will end up trading higher than it's fair value.

    • first let me say that i am a math major out of the OHIO STATE UNIV. I HAVE NEVER READ SO MUCH BULL.... IN ALL MY LIFE whats going on with this stock sad to say is a sector pullback. if anyone would care to check all of the chinese game stocks are at the bottom of their 50 day moving average. these stocks in china are considered defensive plays. they will bounce on earnings.CYOU NTES GIANT SHANDA , CHECK EM OUT. GLTA

      • 2 Replies to barrydiangelo
      • I agree that your math is fallacious, because GAME actually now comprises ALL of SNDA's gaming business and assets (and liabilities)--minus its original cash plus the cash and stocks derived from its spinning off GAME. (Also, please note SNDA's 5-year noncompete agreement in GAME's perspectus.)

        In essence, SNDA screwed its shareholders by selling its gaming assets for $10.50 to $12.50 per share--but the screwing only occurs if GAME's share price doesn't increase in valuation. SNDA is betting that GAME will increase in value, thereby increasing the value of SNDA's 71% of GAME's stocks.

        That's why SNDA has dropped nearly $10/share since GAME's IPO. I believe that GAME has been getting battered in order to give the powers-that-be the time to unwind from their SNDA positions and buy into GAME.

        I've seen this kind of manipulation again and again. GAME will increase in value as soon as the big boys' unwinding of SNDA has occurred. SNDA is betting on it.

    • I thought I've seen it all but you are the best, or should I say, fuzzy math at its best. You are a liar, dam liar, and your name must be statistics. I don’t know where you learn how to do the math and furthermore how you try to use that to value a company at any given moment. I usually have some kind of response to any kind of theory or set of assumptions put forward by anyone, whether I agree or not, but this is so farfetched, I would respond to you in a most strong form of response I know: no response.
      You are insulting my intelligence and I believe everybody on this board.

      • 1 Reply to hangmaniceman1
      • I agree that your math is fallacious, because GAME actually now comprises ALL of SNDA's gaming business and assets (and liabilities)--minus its original cash plus the cash and stocks derived from its spinning off GAME. (Also, please note SNDA's 5-year noncompete agreement in GAME's perspectus.)

        In essence, SNDA screwed its shareholders by selling its gaming assets for $10.50 to $12.50 per share--but the screwing only occurs if GAME's share price doesn't increase in valuation. SNDA is betting that GAME will increase in value, thereby increasing the value of SNDA's 71% of GAME's stocks.

        That's why SNDA has dropped nearly $10/share since GAME's IPO. I believe that GAME has been getting battered in order to give the powers-that-be the time to unwind from their SNDA positions and buy into GAME.

        I've seen this kind of manipulation again and again. GAME will increase in valueas soon as the big boys' unwinding of SNDA has occurred. SNDA is betting on it.

    • you need to have a look at the numbers.

      snda did not have 1.4 billion in cash prior to the ipo.

      Also before the ipo spin off snda was pretty much ONLY valued for the games business.

      lastly markets are not perfect, take a look at the mis-pricing between snda and game the last week.

    • Thanks for the input.Nice work.

 
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