So let me get this right......ATVI is worth 20% more than Starbucks? ATVI is worth only about $7 billion less than Master Card??? Will anyone know what WOW is in 5 years? What's he DURABLE competitive advantage?
Yea, Warren Buffet and I might just go ahead and sit this one out. Good luck.
Two words: Parachute Pants
Two more words: 8-Track
One more word: Disco
One more word: Atari
Two more words: Donkey Kong
All of those things were WAY WAY WAY WAY WAY WAY WAY WAY WAY more universally embraced than WOW. Everyone on earth can still tell you all about them. However, only about 1 in 10 people could begin to explain what WOW is. My friend, you have no earthly clue about what you're talking. I do. That's why I shorted ATVI back on July 6. Time will tell, but your argument is sad. Not that there isn't a reasonable long argument....it's just that that one isn't it. Good luck.
Hmmmm, well you make good points. And, when I review the quarterly cash flows, I am a bit compelled, particularly in light of the cash and debt (none) positions.
Here's the thing:
1) how durable is ATVI's market position? This is a tough question, and maybe perhaps impossible to answer. If you asked how strong/durable AOL's position was in 1999, you'd have got an answer that was 100% wrong. Same would have gone for My Space 3 years ago or Compuserve in 1995......etc.
2) What is the WOW movie going to do for ATVI? Too small a factor to matter, or important?
Compuserve and AOL, to anyone in the world of tech., were never going to be dominant forever when neither made plans for the end of dial up and tried to sell a service that could be replicated, more or less, by other less invasive technologies and applications. As to MySpace, well they couldn't exist forever now could they? No brainer there either.
ATVI, while maybe a bit overpriced, is in a not quite mature industry but certainly mature enough and they're a leader. That's good enough for me, at least on this point of durability.
I think "durability" is exactly the problem the with investment thesis (loosely speaking) of the original post. This is exactly the type of company the sainted Mr. Buffet loves. Living with a discriminating gamer who waches lots of gaming media Blizzard alone is the very definition of "moat". Respected, anticipated, Blizzard fanchises are the best in class. They have an addictive product (Mr. Buffet likes these, mmm... Coke), loyal customers (I can hear my boyfriennd playing WoW in the bedroom right now), a quality product, no debt and lots and lots of cash.
Now, is it overpriced? I think a bit. Could it suffer a sea change in media it can't navigate? Possibly. But does it have a valuable brand, fun fucking games and a proven and fairly piracy safe subscription model? I believe so.
If this is not a 15 Billion dollar company now, it will likely be. Only a trader wouldn't get that. Warren and many others do.
PS. Who saw the eventual downfall of AOL? Me for one, and many others. When they merged with a media company rather than a telecom, I knew the jig was up and Stevie Case was more salesman than businessman.
What the hell does the availability of a used copy of one game have anything to do with the relative price of this stock?
I mean I'm long here too, but it seems like a pretty silly indicator for PPS.
If there are only 13 used on amazon.com, the easiest place on the planet to sell a used game, I wonder how many used games are going to be in retail centers??? Leave you investment decisions to anybody but yourself, common sense and being practical arn't in your genes.
I hear ya...But THIS is what you need to look at
Total Cash (mrq): 3.03B
Total Cash Per Share (mrq): 2.355
Total Debt (mrq): 0
Total Debt/Equity (mrq): N/A
Current Ratio (mrq): 3.432
Book Value Per Share (mrq): 8.898
Go to a video game store and try and buy a USED COD4 or a World at War...my point is its its hard to find, even now you have to buy these games brand new because of demand...also consider the downloadable content for each game at $5-10 for additional map packs every 3-5 months. If you are simply talking stock price, this stock gets so much hype and Modern Warfare 2 isn't here yet and there is rumors that world at war has a sequel coming.
"1.2 billion in free cash flow"
Uh, what? Gotta love pumpers who just invent numbers. Maybe learn what "free cash flow" is....then realize it's more like $400million per year, on a good year.
You know who else made some cash flow once? Compuserve...also earthlink....also atari.