Who doesn't know all that? Especially Icahn with his inside connections. And if it were all true and looking so good, nobody would be worried about a Z bomb. Hell, how can you defend the guy while casually talking about the existence of the anti-investor phenomenon that Z created?
It's called Stockholder Syndrome I think. In over 6.5 years Z has the SP exactly where he started, with the market 65% higher. You can make all the back of the envelope comps and excuses you like, at the end of the day it's the SP that matters. If you must compare, then how about back in 2006 when investors were still looking forward to Bioshock, LA Noire, new Max Paynes, new Midnight Clubs, etc. Now, not so much. I mean Bioshock is a good franchise but it's not sending the SP to new highs. RDR was big, though it was already in dev before the $2M per year man came in. Now 3.5 years later we still have no idea when to expect a sequel, while Ubi and ATVI crank out 9M-20M iterations every year.
"leaving 1+ billion still "in the bank"."
What? Oh and don't forget to subtract out the debt for the future convertibles due.
"I think Z's team did a great job revamping the company and nurturing new IPs."
If that were true the stock wouldn't be around $17, which is about where it was in Feb 2007 just before he took over and became the highest paid guy in the business. The Nasdaq is up 65% since then. Share count has also exploded since then.
There's no such thing as a non-GTA year, because they always include GTA catalog and other minor skus when they say they're profitable without it. Then there are the big loss years too (after promises of being profitable).
The point I was making about the market is hype and promises trumps value. TTWO could rise 5% on value while the market rises 10% and the no-profit hype companies rise 30%. That's not what I would call a win. Things might be different if the company weren't run by a vampire albatross, dead weight sucking all the money from the host, too busy gorging to bother telling investors what to expect in the future.
Next gen hype is strong, so ATVI and EA rising despite clear signs that sales of CoD and BF are off 20% or worse from last iterations. Unlike TTWO they have announced specific next gen titles which have hype. In this market it's better to promise profits in the future, no matter how far out that may be, than to actually have profits.
PT $38.55, from Benchmark today via Mike Hickey. He has covered this space for years.
"As we look forward, we believe their core business model; the physical distribution of hardware, software and used product through a traditional physical retail network, will be increasingly displaced from growing consumer adoption of digital / streaming content distribution channels and the competitive pressure from mobile platforms"
How did you manage to write so much yet say so little? Are you a politician? I speak of the issues facing the company, you ignore them and just say it's going higher based on your experience of buying it before a 10% decline.
1. At the start of last cycle the software prices went up 20%. This cycle, 0%.
2. At the start of last cycle GME was starting a 50% store expansion. This cycle, they are declining.
3. Digital continues to grow and show no sign of stopping. Every digital sale is not only a likely lost sale, it also means no used game. Most gamers buying digital will do so directly from PSN or Live.
So compared to last cycle we have revenue compression due to pricing and lack of expansion, and margin compression due to used games decline.
I may have written in haste earlier. A drop of $3 per day puts TWTR at $0 next month.
Perhaps extrapolating a very short time window into the infinite future isn't helpful.
Perhaps it isn't different this time.
Of course it was a "great start". Don't you remember all the analyst pumping this year, and their estimates of holiday sales being down 50%, therefore only being down 24% is awesome? Actually, I don't remember that either. I seem to recall they were expecting significant growth. Oh well, maybe December will have software growth, when almost nobody can find the consoles and current gen games are having their prices slashed?
A simple extrapolation of $2 per day produces $600 by end of next year. Add in any impact of real news, not the kind this week that said, "Our staff continues to come into work", and you get $800. Then figure the market often over-shoots, so $1,000. A marketcap of over $500BN before they show a profit seems more than fair.
You weren't impressed by the "news" that their engineers are working on ways to improve their ads? They might as well have released news saying, "Our staff showed up for work today".
Perhaps it was deleted because you are lying again?
Fully diluted share count going from 129M to about 113M means an EPS increase of $0.50, not $0.75 as you claim. Where is the SEC, hmmm?
I agree Z was doing Icahn a favor, and it was probably arranged in advance that the money raised in June would go to Icahn's shares. However, playing devil's advocate, and I'm not one to defend Z, but an argument could be made that the recent incredibly bad CC, even by Z's incredibly low standards, was in part to prevent the price going higher before buying Icahn's stake.
The problem with Pach's P/E targets is he doesn't back out cash. I find it absurd to include cash in valuation, and ignoring it puts TTWO at an artificial disadvantage and ATVI at an advantage, who had about $3BN in cash before and are now net $1.5BN in debt, so all of ATVI's SP is their P/E. Back out $6/share or whatever in cash for TTWO (net of convertibles due), and only $10 of the SP should count for the P/E, making a more reasonable 11x-12x, which is well below ATVI and ERTS, despite ATVI's core franchises under-performing and the insider selling of their top Blizzard guy.
I enjoyed Bully but I don't see the upside of a sequel. There are substantial differences to Red Dead being a sequel. First of all, RDR went open world, which was a big factor in its success, whereas Bully started open world. Secondly, GTA and Red Dead represent aspirational fantasies of causing mayhem and being a Clint Eastwood style force of nature. Causing playful mischief in a school isn't such a thing. It's a fun novelty at best. Thirdly, these are different times, with all the news stories in recent years of teens being bullied then killing themselves.
No, it decreases the chances of an acquisition. That must have been Icahn's big play with the Board members too. He would try to generate interest for an offer, then dump into that spike. What does he care what happens after that? If the offer falls through he can repeat the game at GTAVI time.
Yeah it's the 4.2M I'm talking about in particular, which could have been bought in June. Are you sure they couldn't have gone through the launch without the additional dilution? Didn't they also have a line of credit available? Even if they couldn't afford to buy back much (any?) of the 7.5M in June at $15, the recent EPS FY raise would have been much larger without the June convertibles.