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divisions left are dead, the equivelant of Time Warners purchase of AOL, an obsolete platform bleeding subscribers and outdated worthless games.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.
"Re: Response to yes4aaipi 19-Oct-10 10:12 am You are getting a lot of 1 stars. Did you ever stop to think that maybe, JUST MAYBE, you are wrong?
Sentiment : Strong Buy
(4 Ratings)Rate it: mikecart1_v...
apparently, YOU were wrong 2 weeks ago. and you'll be wrong when it falls to 90 cents too.
don't let the idiots mislead you. listen to Q2 conference call (or lack thereof), read the Q2 report, and read THIS post on what was different than expected, particularly their lies about more net cash than was reported.
Management here is hopeless like XING's management. Worthless thieves imo.
For folks who play this for pennies, it is amazing! Of course an inept management is even more amazing or just crazy! Wonder wshen they will lay out a plan for telling us where they really want to take GIGM? Used to think this was one you wanted to keep your eyes on and now you can just close them and weep! From an ol ol greybeard! FWIW JMHO!
i will bump this post so i don't have to explain again why Q2 appeared to be a game changer versus what we had hoped for.
to all those asking why people were bullish after 9 months after non-reporting, and they started reporting/hosting CC's again, Q2 was a death blow for the above reasons.
GIGM will drift to $1, because it has no plans to attain profits in the next 2 years, thereby burning up all remaining cash.
If any when GIGM changes strategy from suicide to a chance for a future, and when the stock discounts to $1 given their losses, news, and other things mentioned..
GIGM is story specific, and will not follow the market..
I'd stick to larget caps that have been beaten down right now.
I don't want to continue this. Your logic regarding the recent earnings are well thought out and also well written. But, as you said we're two different animals. Thanks for wishing me luck and please refrain from calling people stupid especially when they turn out to be correct.
If you disagree with my top reasons for my new target, state why you disagree, and provide facts or reasonable probabilities on outcomes for why you disagree.
Otherwise ill assume you agree with me.
I think the pursuit of games and writeoffs will drain all of GIGM's net-cash within 12-18 months, which should stand at $74mil by end of Q3 (or less), after the IAH purchase settles...
I think Hui or Quincy will leave the company within 3-6 months.