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GigaMedia Ltd. Message Board

  • sheezymcneezy sheezymcneezy Aug 30, 2010 1:49 PM Flag

    GIGM worth $1, will bleed.

    Top reasons, i had to lower my short term target to 90 cents to $1.10 per share..

    1) Q1 guidance of $115mil net cash for Q2 (cash minus short term borrowings) was a lie, and overstated by $20million.

    2) Q1 guidance $95million net cash for Q3 obviously must be lowered by $20mil or more as well, making Net Cash $74mil or less by Q3..

    3) Their only divisions left are dead, the equivelant of Time Warners purchase of AOL, an obsolete platform bleeding subscribers and outdated worthless games.

    4) Management's pursuit of games, after losing $100mil+ in 2009, is a death sentence.. Their only chance to survive is to immediately divest away from games, admit their failure, conserve cash and quickly brainstorm for a new concept and sector, in a recession environment.

    5) TC2N, GIGM's subsidiary, is stealing from them (not a surprise) putting into question all their reportings and internal controls.

    6) Q2 EPS -20 cents versus 2 cent expectations with expectations of improving rev's and expense reduction. Guidance same for next 2 quarters basically.. Not that guidance can be trusted.

    7) Management incompetent and crooked. Constantly misleading and not even competente enough to recognize spending trends, or sectors that have potential. Always mislead, and overestimate even the tiniest potential. IAH limited to box sales in a very poor region.. with high expenses (ie barely profitable)..

    8) GIGM is unable to turn course based on their cash. A reorganization would need at least $100mil imo for aquisitions to change course from this disaster. I dont see how they can survive in their current form.

    9) Their gameplan is the same from 2008-2009 where they sit around doing nothing, paying millions to companys to 'rent' a license for an old game in 2005, hoping to build up a DEAD AND BURIED business of funtown, that is like AOL, obsolete.

    10) No hope in the future. Everest turned negative, is dropping position on pokerscout, and is now mostly sold. The remaining 40% cannot be sold for 3 years or more, and will not contribute in any meaningful fashion anytime soon. Value is declining as we speak, as per their warning of the value being adjusted from the 'investment' column, to a loewr value soon.

    11) Last but not least, share count growing. I refuse to support a company giving share incentives for doing ZILCH. Diluted shares is 60.17mil, and basic rose 600k in one quarter to 56mil almost.. This will continue. From 2001-2006, share count was NEVER increased from 50.4 million basic and diluted. This is further evidence, this company has no regard for shareholder interests.

    Overall, diluted shares of 60.17mil and rising puts market cap over $126million today. Based on prospects, failures, expected losses and writeoffs, lack of any business that isnt dead, and inability to change course, and everything else mentioned..

    I will put the range between $1.75 and $2.25, which imo, will lead to a swift breakdown to $1.10 short term (3-6mos or sooner)..

    Thursday was a game changer imo, with the TC2N theft, $20mil lower net cash, and Huge loss and guidance per share being the highlights of what was unexpected..

    In essence, theres nothing even remotely to look to the future that will grow or turn anything positive.

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