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GameStop Corp. Message Board

jesterbunk 46 posts  |  Last Activity: Jul 10, 2014 12:08 PM Member since: Apr 18, 2006
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  • Reply to

    Acting Like Their S*** Don't Stink

    by rayguy222 May 15, 2014 4:34 PM
    jesterbunk jesterbunk May 16, 2014 11:44 AM Flag

    It's amazing to see the defense of management compensation here. Remember Z is the highest salaried guy in the industry. For this, consider the results:

    - Share price lower than when he joined 7 years ago. Share count much higher.
    - Total non-GAAP earnings in nearly 7 years (excluding his first huge loss FY which I'll give him a pass for) is about $6, so an average of $0.85, which is coincidentally around the guidance for the upcoming FY. As for the FY after that, who knows? For all we know they guide for a major R* release, announce it, then delay it for a year or two and miss guidance by a mile, as happens often.
    - The difference between total FY revenue compared to guidance, and total FY non-GAAP compared to guidance, are both slightly negative over the long term (i.e. both were stick saved by the phenomenal success of GTAV). There has been huge volatility in guidance and results too, which works best to the benefit of the insiders who can trade on that knowledge gap, aka not shareholder friendly.

  • Everyone here knows, partly because the facts have been posted here and anyway it takes seconds to find on the internet, that 5 funds contributed to the C series investment, and Thrive led the funding. So if TTWO had 50% of that $20M, and Thrive had more, and the other 3 funds bought some too.... hmmmm.... wait.... ummm that doesn't add up, does it? Why are certain longs here so abysmal at simple math?

    Also the idea that Twitch leaped in value by about 1200% from September to May sounds optimistic at best, or more likely ludicrous.

    And the dates, Insince says the deal took place before the release of GTA5. The game launched Sep 17th, the Twitch investment deal was announced Sep 30th. Another lie from Insince.

    $125M == $1.56 a share? Which companies share count were you using here?

    So what is Insince's motive for posting these lies here, and what fool gave a thumbs up for such fiction?

  • Reply to

    That Seeking Alpha write-up is pretty good

    by speculawyer9 Apr 29, 2014 1:01 PM
    jesterbunk jesterbunk Apr 29, 2014 4:55 PM Flag

    The author attributed hundreds of millions more on the balance sheet than is actually there, by conveniently forgetting the $350M in royalties due, and also mistakenly attributed ownership of Borderlands to the company.

    I refuse to sign up for that site so could not see page 2. What and why is his prediction for earnings next two years?

  • Reply to

    Twitch

    by budfockz May 18, 2014 8:44 PM
    jesterbunk jesterbunk May 20, 2014 9:17 AM Flag

    frb,

    I know you're not good with numbers, and in this instance it's because it's impossible for TTWO to have put in $10M. The Series C investment was $20M, it came from 5 investor groups, and it was led by Thrive Capital. Hence why I estimated $5M, give or take. For all we know, it was $1M. You could easily make a realistic case for $3M, if the lead group put in $8M and the other four groups split the rest.

    The third round of financing wouldn't have the same ROI expectations as earlier rounds, because of course there's far less risk. That's why I thought 3-5x. Maybe it was higher though. A lot of it comes down to what the exit plan expectation was. Did the investors think Twitch would sell for $500M, or IPO for $2BN? I have a hard time believing it was valued at barely over $100M in late September, on the eve of the console launches and just over 6 months before selling for $1BN.

    Everyone knew Twitch would sell before long, so this gain isn't a huge surprise. I think TTWO would have seen more response from an IPO, because more hype. And does it only apply to GAAP earnings? Pubs don't like investors valuing on GAAP because they like to hide many of their costs in non-GAAP.

  • Reply to

    Acting Like Their S*** Don't Stink

    by rayguy222 May 15, 2014 4:34 PM
    jesterbunk jesterbunk May 16, 2014 2:54 PM Flag

    Yeah exec compensation is crazy at many places. Suggesting people might as well not mention it would be like telling some perma-bull that his daily pumping of some stock for years on a message board is having no effect.

    Z has a poor relationship with analysts, R* runs their own show exclusively, which leaves him in charge of 2K basically. And how's that going? Gearbox owns BL. Mafia is in a mess it seems (layoffs and talk of moving project between studios), XCOM for consoles was a mess, and they've closed the Bioshock developer. I give EA more credit for NBA 2K's success than Z. What else has 2K done during his 7 years? So is he worth the highest salary in the industry? Not even close.

  • Reply to

    E3 Predictions

    by whasupwhasdown Jun 4, 2014 4:45 PM
    jesterbunk jesterbunk Jun 5, 2014 9:39 AM Flag

    If you were to rank Rockstars previous E3 announcements, which years would you say were the best?

  • Reply to

    Acting Like Their S*** Don't Stink

    by rayguy222 May 15, 2014 4:34 PM
    jesterbunk jesterbunk May 17, 2014 12:10 PM Flag

    Z has the highest salary in the biz. It doesn't matter how many years you average that over, it's still going to be the highest number. That's just simple math.

    You call his 1000% boost this year as being due to performance based incentives. LOL. Let me break that down for you.

    1. The options he sold came from grants after he joined the company, with negligible industry experience. In fact he waited a few months to get those grants, and conveniently made sure to first totally crush the FY guidance downwards by a massive amount, sending the stock price tumbling from near $20 to $14, and that's when he got his stock options priced.

    2. It's common perception that Z, or any CEO before him, has little if any control over Rockstar. Since all the recent upside came from GTAV, that's not his performance that's leading to those rewards.

    3. To get those personal profits, basically all Z has to do is not get caught doing something illegal, and not completely run the company into the ground. Golf clap for that performance.

    4. As I mentioned, over the long run of his tenure the revenue and non-GAAP profit guidance tends to slightly exceed actual results. However there are significant upside and downside gaps there. In the most recent case the company beat FY guidance by $2, creating an opportunity for him to dump a huge amount around $20, and then the company came in with weaker guidance and transparency than most expected, leading to the stock now being 5% lower than where he dumped. That's the knowledge gap I referred to which insiders can take advantage of, at the expense of shareholders.
    You're not a stupid guy, but your weak and naive defense of Z certainly makes you look that way.

  • Reply to

    Hickey

    by joethdo Jun 27, 2014 10:40 AM
    jesterbunk jesterbunk Jun 30, 2014 6:02 PM Flag

    Perhaps the question of why that release date was chosen by TTWO should have been asked earlier, since the release dates of all the other AAA tent-poles you mentioned were already known at the time of the announcement. Even BF Hardline, which at the time of 2K's announcement wasn't official, was rumored to be a holiday release. If it doesn't release on last-gen this year, a better question would be why develop it at all?

    As I said, announcing a release date that near the end of development and then delaying it would be tantamount to lying IMO, and it's interesting that you are not only open to that, you seem to welcome it.

  • Reply to

    Twitch

    by budfockz May 18, 2014 8:44 PM
    jesterbunk jesterbunk May 20, 2014 10:55 AM Flag

    "I used your numbers to just show you there is a potential for a 25% upside to earnings guidance, with your low ball estimates right or no? Beg to differ?"

    If you forget about the cost of investment, and get the number of shares wrong, and count this one-time investment gain in non-GAAP, then I could see how *you* might get to 25%.

  • Reply to

    So basically back to the pre-earnings price

    by speculawyer9 May 30, 2014 3:23 PM
    jesterbunk jesterbunk May 30, 2014 7:53 PM Flag

    In non-GTA years, non-GAAP:

    FY09 Guidance was $0.00-$0.20, result was ($1.12), so a miss of up to $1.32.
    FY10 (RDR) Guidance was ($0.40-$0.60), result was $1.06.
    FY12 Guidance was $0.10-$0.35, result was ($0.71), so a miss of up to $1.06.
    FY13 Guidance was $2.00-$2.25, result was $0.36, so a miss of up to $1.89. (GTAV delayed)

    As you can see, an enormous amount of over promise and under deliver, with one exception when RDR surprised to the upside. Still, for those four FY's with RDR included, that's an average of ($0.10).

  • Reply to

    Acting Like Their S*** Don't Stink

    by rayguy222 May 15, 2014 4:34 PM
    jesterbunk jesterbunk May 18, 2014 1:09 PM Flag

    The delusion continues.

    Never mind the fact that Z has been the top guy since 2007, you say he isn't accountable for Infinite (2007-2013) even though he was most definitely the CEO (1/1/2011) for the latter half of development, the most expensive part of development (games tend to staff up more during full production periods). At the same time, you credit Z for building the RDR brand (2005-2010), the last game having shipped 8 months before Z became CEO. Because logic? P.S. That's a Rockstar game...

    I love the irony that you keep saying other people are confused about compensation, while you evince such ignorance. Yeah Kotick had a lot of compensation in 2012, I remember that. Z's salary is higher than Kotick's though. How do you get from TTWO paying ZelnickMedia $2.97M to Z only having $11K salary?

  • Reply to

    Acting Like Their S*** Don't Stink

    by rayguy222 May 15, 2014 4:34 PM
    jesterbunk jesterbunk May 17, 2014 11:58 AM Flag

    "I think it's clear Z is building brands and not milking brands like Kotick. Here's another 'fact', TTWO paved the industry way with DLC via GTAIV and every blockbuster after that. TTWO changed the industry, Z was in control of TTWO extreme success with DLC, so yeah I kinda do attribute this to him too. Look at the ratings of the video games, easily the highest rated meta-critic games for the past several years. Let's look were Z entered the company. It was a SEC fraud ridden company with excessive spend. Z continues to cut cost, e.g. irrational."

    So he's building brands while at the same time laying off the team behind one of their highest rated brands, the future of which is now completely unknown. See also Max Payne.

    And please explain more about how it's a "fact" that TTWO led the industry with DLC. You might want to check TTWO's digital numbers against EA and ATVI, and consider the huge sales of things like CoD map packs. The only thing TTWO led the industry in with DLC is their foolish idea of taking far too long to produce and sell said DLC. Most people here expected large paid DLC for GTAV long before now.

  • jesterbunk jesterbunk May 31, 2014 9:07 AM Flag

    It's so obvious TTWO has been traded on inside info many times in the past, and I bet Icahn (and friends?) have been in on that.

  • Reply to

    Hickey

    by joethdo Jun 27, 2014 10:40 AM
    jesterbunk jesterbunk Jun 28, 2014 5:20 PM Flag

    Destiny was supposed to be out Fall 2013, and the longer it takes to release the more of a drag that legacy console support becomes.

  • Reply to

    Twitch

    by budfockz May 18, 2014 8:44 PM
    jesterbunk jesterbunk May 20, 2014 11:57 AM Flag

    "Jester I don't have time to explain 6th grade algrebra"
    You would need at least a year to learn it first.

    You said: "you can spin anything as bad news."
    What I said: "At an expected 3-5x return, that should be a decent profit."

    So who is spinning? Other than you with your not-as-smart-as-a-6th-grader algebra?

    Btw, I was sorry to hear that you loaded up on short term calls when the stock was over $22, and again before the latest earnings.

  • Reply to

    Analyzing FY 15 Guidance

    by joethdo May 17, 2014 4:09 PM
    jesterbunk jesterbunk May 17, 2014 4:19 PM Flag

    Sure it might look easy to beat guidance using high numbers like $42 for revenue per game.

    And hasn't GTA Online and DLC so far been underwhelming for most shareholders? Yet you immediately suggest a "conservative" 20% of install base will spend $50 on a non-existent season pass for unspecified dlc. This is the kind of perma-bull thinking that sets people up for constant disappointment.

  • Reply to

    Acting Like Their S*** Don't Stink

    by rayguy222 May 15, 2014 4:34 PM
    jesterbunk jesterbunk May 17, 2014 4:03 PM Flag

    frb, did you take naivete pills today? First it was your embarrassing defense of Z's compensation, which I fully debunked. Now you're talking about Z building brands.

    The last Bioshock was over a year ago. We don't know who is working on the next, we don't know if anyone is working on it at all, we don't know when it might ship, if ever, we don't know if it will be any good, or if it will be profitable, and this is your example of Z building brands. LOL. You also describe Infinite as "very underwhelming" and unprofitable, and wasn't that also Z building brands? Similar scenario for Max Payne.

    Here's a little secret. Good TEAMS tend to come before good BRANDS. It's the team who makes the highly rated games that get the gamers excited. It's a lot easier and a lot more likely for an established good team to create a good game in a timely fashion, than to staff up 100+ people from all over the place and hope for the best, as Curt Schilling and Rhode Island learned to their great cost. Now thanks to Z's strong brand building, we have no idea the state of Biohock or Payne, and many of the talented devs behind them are no doubt working for TTWO's competition. That's brilliant! I guess that's why he's the highest paid guy in the biz. It takes real talent to pose in the gym while Rockstar does the heavy lifting.

  • Reply to

    Twitch

    by budfockz May 18, 2014 8:44 PM
    jesterbunk jesterbunk May 18, 2014 9:31 PM Flag

    Figure TTWO put in single digits millions, $5M plus or minus. At an expected 3-5x return, that should be a decent profit.

  • Reply to

    Acting Like Their S*** Don't Stink

    by rayguy222 May 15, 2014 4:34 PM
    jesterbunk jesterbunk May 18, 2014 11:46 AM Flag

    @frb,

    1. You quote Levine's letter like it's the full story. I suppose you believe that various execs in the business world have "left for family/health reasons", and that the Board truly does "thank them for their hard work". I suppose you also believe your ailing dog is at a nice farm up-State and living the dream.

    2. Z started in 2007. TTWO was paying $2.5M for ZelnickMedia, for which ZM contributed the services of Z, Feder and Slatoff. The CEO Feder was paid by ZM. Later, Z realized, "Why am I paying for a CEO, when I can just do the job myself?" So now TTWO pays $2.97M for which they get the services of Z and Slatoff. What do you suppose Slatoff earns? $600K? Z is therefore paid around $2.4M. Kotick's salary in 2013 was $2.1M. EA's CEO had $800K salary.

    It's hilarious that in one post you credit Z for "building brands" with Bioshock (after you called the last one underwhelming and unprofitable) then in other posts the same day you say Levine had 100% control over Bioshock.

    Thanks for the entertainment yesterday. It's rare to see someone post so much while at the same time knowing so little. You've sailed right past ignorance into the land of delusion.

  • Reply to

    BOOYA WE GOT GTAV NEXT GEN FALL 2014!!!!

    by ttw012 Jun 9, 2014 10:55 PM
    jesterbunk jesterbunk Jun 11, 2014 10:03 AM Flag

    ttw, we had a conversation a while back where SeekingAlpha was mentioned. You cut and pasted a story and gave a username/password to use. I just wanted to say thanks for that effort, albeit belatedly.

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