Thanks. And that's the size of it. MCZ may have needed more flexibility for overseas financing and WF was not going to provide that overseas mechanism or be a complement to work alongside another provider who would. A going concern paragraph is nothing to be disregarded normally. But, as you say, the situation is mitigated.
The working capital was too tight to enable RB4 to occur and thereby not only rescue but invigorate the balance sheet to solid health and working capital strength. Yet, there's no way the commentary of the past CC would have happened without management having strong confidence that the financing options were there.....because, as Karen acknowledged on the call when queried, "yes, the working capital is tight." However, the liquidity situation just had its belt loosened several, several notches by these credit facilities.
I'll echo your expression: "Full steam ahead."
I've seen you use the word "halk" over and over; finally looked it up....yea, such a fitting word;
translation...."this is gona 'nook' sone (mini-translation of sone, "soon")
I said you were on the right track....I think you know what I mean; but, for clarity, given your assumptions, the 22M you refer to technically would not be "profit" but "income from operations (before taxes). Using your assumptions, 60% of the 22M would be profit while 40% would be taxes (recovered).
....and I will add "again"that this deferred tax asset recognition we just were all alerted to via the latest report is the best hard data we have received "ever" here, IMO, with regard to having some substantive guidance on future operating results expected.....and further, this information makes the view that selling here is pure nonsense one of the most sensible conclusions one could possibly reach with regard to stock market investing.
Well, the simple answer is found in the meaning of "deferred tax asset." It represents the "amounts of income Taxes" recoverable in future periods. So, indeed it does not reflect the amount of profit but the amount of taxes.
I may be wrong, but I believe about 7.2M, or something like that, was deemed recoverable, vs. 8.8...but I didn't look back (just going on memory....seems like part of that 8.8M did not satisfy the deferred tax recognition criterion). You are on the right track, Bfrnk.
Thanks from me too. I was not aware of this option to investigate specific products and their progress. Thanks again.
Look back to January 18, 2011. MCZ dropped off a cliff on big volume after trading up solidly into the 1s (went back into the .70s). On about Feb. 2, MCZ released a brief statement (press release) by Darren saying he didn't know of any reason for the decline and that guidance (they did give guidance during RB3....very understated mind you....I remember it well....for high single digit revenue growth) was being reiterated. The stock immediately rebounded and then a number of days later was off the races when those memorable stellar RB3 driven earnings for the 3rd fiscal quarter of 2011 were released.
As with now, so it was then; there was no news and no information on who did the sudden selling or why. Whoever did it, though, sure ended up throwing away some very valuable shares. History does repeat itself.
Yes, Dennis, but this is different. Growth is dependent on PC Drivers, not ABHI. The consumer market road is through the Austin business with the 4 million existing subscriber base. Up till now, there's been no word from PC Drivers, just from ABHI management. The comments today about market acceptance came from Michael Hurd, CEO of PC Drivers. I'm not blowing that off. This tells me that the software is "that good." The finances still are of grave concern to me, though. But at least we know they have a great product.....not just ABHI saying it's a great product.
The sales growth projection was made by PC Driver's Michael Hurd today, I noted. ABHI could not have released this statement if it was not approved by Hurd. This gives some substance to the potential of Veloxum, IMO.
Come on, West; don't jump on every word the company ever says. I don't expect every company I own to say they expect another year of growth. So, the remark is useful and helpful to real investors. Everyone, including myself, has owned companies that said it was going to be a year of rebuilding, for instance. As to acquisitions being a threat, that's unknown and I don't think it's why the price is down today. This is just technical noise right now. Let's see how the next report looks. Until then, my opinion remains that there's much value at this price level and it gives investors additional opportunity to prosper on big swing trades. I just added some trading shares moments ago, again, in this 18.50 area and will pick up more if it goes below 18 again. It popped back to 20 the other day in a heartbeat, giving great opportunity for a solid trade, while all of us await the next report. IMO, it will do so (pop up hard) again before the next report. My guess is we'll be in the low 20 region around the release of the next report.
We concur; thanks for the comment. As a CPA, I can affirm that establishing the deferred tax asset means the company and its auditor believe it is more likely than not that the profits will be realized. So, we actually have better guidance from, due to that asset being booked, than ever before (at least in my recognition). We can actually crank out some hard estimates.
I agree with all you said and would just tag on that perhaps all on-lookers, including you and me, are seeing RB4 as another one trick pony for MCZ vs. something that will spur long-term growth. Many, including myself, fell for the Warhead headset (proclaimed as greatest wireless headset ever and related xbox 360 supposed co-branded headsets) being a continuing sales growth driver after RB3. There's not much to fall for on the backside of RB4 this time. There is the hope that RB4 has some longer legs per Harmonix but that's yet to be seen.
The good thing is that regardless of what you or me or anyone writes here, if RB4 is successful, MCZ will find related success and the stock price will rise. Also, new comers will drive up the price, not those of us already in MCZ for a long time now. The new comers will brush those of us with a history off as knowing nothing. It always works like that. To them, MCZ will be the greatest thing since sliced bread. So, we can open our eyes wide and benefit from this RB4 thing responsibly and well. Hindsight may help this go round.
All the best,
....he acts like biggest nutjob on planet, IMO.....still think it's for show.
It almost seems that someone is working to acquire JAKK. The price keeps advancing nicely but in a very controlled manner. I haven't a clue and am just throwing a notion. But with other companies I've owned before that have been acquired, they follow a similar pattern to what has been occurring with JAKK.
IMO, MCZ at .40 prices a much greater likelihood of RB4 failure and a focus on any related risk (adverse setback....credit line, logistical problems,etc.). On the other hand, MCZ at a buck right this moment would price in fairly strong assurance of RB4's success relative to potential failure. MCZ, as a microcap, and with an underperforming track record, is not going to receive the benefit of the doubt. Doubts will have to be removed by some proof.
IMO, RB4 cottons to MCZ's strengths and I'm bankin' on that proof becoming evident by fall. In the meantime, I believe a balanced stock price (not overly pessimistic or optimistic) relative to something with the potential of a RB4 to a very small company like an MCZ is somewhere in the neighborhood of the Roth target.....between .60 to .70 a share. Yet, it's pretty hard to argue against the obvious that the market may not give MCZ any benefit of the doubt (i.e. balanced pricing) until the press releases start coming about RB4 shipping, etc., press releases that make it clear that sales are getting logged in.
.......good thing is that I figure sales will start occurring by late August or early September (shipped units in advance of the October 6 release date). If we do see MCZ run again well above the $1 level later this year, who will be banking the profits and who will have foregone them over early concerns of potential failure. IMO, potential failure is slapping the stock price already. It doesn't seem right for some johnny-come-lately to bag the profits from some who have been beaten down for so long and exit over anxiety that MCZ might not perform. I'm definitely pulling for MCZ to get this one right. This is familiar turf to them. They should get this one right.
I bit my tongue hard and bought 30K at .38 when that almost 100k block showed up there. I hope the dump i done, though!. Wow
Well, I'm a balance sheet investor; a company has to have excellent financials, value, and pass any kind of smell test. My entire career has been spent in accounting and I'm a CPA. So to be confused with someone who would pump a worthless scam is not something I'm accustomed to after all these years of investing and posting. I'm well aware of the schemes of promoters of scams. It's sad that everyday people get suckered into such stocks and then feel the need to defend their decision as they see the stock plummet while the promoters abscond with their money. Sticking with valuable well-established businesses with extended operating histories, solid financials (especially balance sheet), reputable auditing firms, etc. is the best way to protect your backside, IMO.
I understand; I think, though, comparing the balance sheets for then and now, we will need to the extra capacity to just produce the kind of revenue that was generated for RB3 and will surely need it for a significantly higher level of revenue. While the credit line draw presently is pretty low, the current ratio is still pretty tight.
As to RB3, the 2nd fiscal quarter still stands as the record 2nd quarter with RB3 shipments in Sept. of 2010 resulting in that big quarter..... over 37M in revenue and .02 eps. That quarterly result got the stock price party going.
Actually, I'm thinking we could require more than a 50M line to take us through the holidays this time....was 50M last time. Of course, Karen has already shown that she doesn't want to spend a dime that is not needed, so I'm guessing they will try to get exactly enough to cover what they see as the peak momentary need during the event.
Again, I understood your point. I was just trying to say that the whole discussion on the board at times about "what if MCZ doesn't get an increase in capacity.....will they issue more stock....etc.", is rather pointless, IMO, for several reasons I discussed in my last post. It's my opinion that the CC affirmed the company's intent and WF's actions to amend and relax covenants for a year implied its cooperation.
I do think more revenue will be pulled into the 2nd quarter, though, relative to RB3, but RB3 brought plenty into that 2nd quarter.
Micro, Karen stated on the CC this past Thursday that they will be working to expand the credit facility. With RB3, it was expanded significantly on Sept. 30, 2010 with a game release date of October 26, 2010. With RB4 expected to be much larger and MCZ's increased role with product, I figure we'll see a credit line increase by late August/early Sept based on the RB4 release date of Oct. 6, 2015.
Think about it. Why did WF just relax covenants for a whole year out from now if they weren't doing so based on anticipated RB4 sales and cash generation? They already have money at stake. RB4 is as important to them as to MCZ since WF already knows MCZ will surely tap the existing credit line in full (only 7M? tapped now). WF doesn't want to see MCZ fall short of success as the surest way for it to get paid back is for MCZ to bring in the cash!
Anyway, it's just my opinion; but I believe WF will expand the facility as needed; again, Karen, on the CC already said that expanding the facility is being discussed. I don't like having unrealistic expectations and then face disappointment but, in this case, I think expecting a credit line increase is highly realistic. RB4 is to be bigger than 3 and WF granted MCZ a significant expansion for RB3....and RB3 did indeed generate a lot of cash for MCZ, rebuilding its balance sheet from the near death days of late 2008 and early 2009. It was good for MCZ and for WF. Both entities remember that well, I'm sure.
The financial situation is disastrous. I also concur that the merger risk has translated into a healthy profitable pre-merger penny stock becoming a cash drain. They put all their marbles on Veloxum.
It is clear, though that they have a product. If you go to the Austin Texas PC Drivers website, you will see Veloxum's Active Optimization solution there. I have no idea what kind of revenue it is presently generating, though. That 4 million subscriber base seemed like it's bread and butter for the future, IMO, (that is, PC Drivers), after they decided to put it all on Veloxum. Yet, even if they are "in business" finally, when you don't have any money left, you have to find a lifeline and it'll cost you.
IMO, for the company, it's either go under or take whatever terms you can get. I've seen a few companies get in dire circumstances to later succeed when they had a desirable product that a capitalist could see warranted a financial lifeline. Even if ABHI is selling the software well as at this time, it's still a crapshoot now because of the financial distress of the balance sheet.
P.S. and O.T. The only event in MCZ's history that drove it from .40 to 2.40 in less than 6 months was Rock Band 3. MCZ is teaming up with Harmonix (developed the Guitar Hero and Rock Band games of the past) to bring Rock Band 4 to the market (release date is Oct. 6, 2015). MCZ's CEO earlier stated at investor conferences that RB4 will be the most significant financial event for shareholders in the history of the company. The stock price remains depressed at .45 just months away from the launch date. FWIW.
Here's my timeline for earnings growth expectations....JMO and based on prior MCZ RB3 history:
Keep in mind that RB4 is to be released on October 6, 2015, while RB3 was initially released 20 days later in the month of October (October 26, 2010). So, I'm pushing the RB4 timeline forward to that extent. Here' my projections:
-Next earnings report (fiscal quarter 1): first week of August (just over a month away)...poor revenue and profitability....yoy declines per CC yesterday.....strong guidance for following quarters, including 2nd fiscal quarter 2016.
-Credit line increase from WF around Sept. 10 (was Sept 30 with RB3)
-RB4 release on October 6
-2nd fiscal quarter announcement in early November.....38 to 45M expected with profitability of .02 or better.....was 37M and .02 in same RB3 quarter
-of course, big quarter to be reported in early February 2016....expecting numbers comparable to what Micro posted already
There's not much added in this post; main thing to note is that we are only a month away from having the bad reports in the past and huge improvement at hand. MCZ booked big sales in the fiscal 2nd quarter of 2011 (quarter ending Sept. 30, 2010) relative to retailer orders in front of the RB3 release date of October 26. You've got to figure that the orders will start at least 20 days sooner this time, thereby impacting the 2nd fiscal quarter of this fiscal year significantly.
Who is selling today on this timeline????