Hmm. There's a good article in "Alpha" that basically says that the offer was "a little low," and then goes on to make what I think is a reasoning error - it says, "Well, you get $13 in cash 'for sure,' and SBSI is a much better 'operator,' so you might wind up with nice capital gains if your patient." (I'm thinking that what that means is that SBSI is screwing OABC's shareholders, but maybe if you "go along with them," you'll "be made whole."
OTOH, it sure seems like OABC is doing all sorts of stuff wrong for several years now. A Texas bank should not have an ROAA around 0.25 - not 5 years after all that tumult. But I'm thinking that what everyone has seen at least once re residential real estate - well, it's true here in NYC - that a low-ball "offering price" winds up generating a kind of bidding war. I mean OABC may have had Sandler advising them. What were the inv. bankers thinking? ... Maybe, their game is - No obvious purchaser was willing to come up with anything close to $30, ... but maybe one of them will re-think things now that it's "going, going, ..."
Seems plausible, because one sees plenty of takeover battles where an improved offer is just 5 or 10% above what proves to be the runner-up, ... and with SBSI's shares bleeding badly, a cash or cash/stock deal at $27 or so (from ?) sure makes sense to me - and not just on a wishful thinking basis. One cannot believe that SBSI is looking for a $10 MM breakup fee - so maybe, they improve their offer and we do get close to $30.
... To be continued (I HOPE) (the last chapter in the OABC book)
I'm with you ... and it is why I took a position, ... but it certainly occurs to me that some of this is "baked in," and the sell-off has to do with "the crowd" guessing less optimistically than you or I.
That is, intuitively - and that's good enough for me in this instance - one can't help but think that if KING doubled and held onto that for even a few days, GLUU and ZNGA would hit new highs - pick a number 6, 6.50, 7 - but that means that the overall "consensus" is less rosy. Maybe, the stocks got to 5.50-5.80 when that optimistic KING scenario was thought to be more likely - but since it was so far off and there was so much uncertainty, they stopped well short of those levels.
Where should (?) - yes, crazy word that - these guys trade if the underwriters either do a poor job positioning the shares ... or potential buyers start getting risk-averse or ...? ... So what if the IPO is only "moderately" frothy - let's say that a week beyond Day zero, KING is up 20%. Are GLUU and ZNGA at levels consistent with that - or is there more downside?
Obviously, there's more to this "game" than this event, but this week and next, maybe not so much!
As for SA - no insult meant, but for all but people on this board, that's mostly a joke. Yes, there are some insightful writers ... and they may echo "professional analysts" (or, very rarely, put them to shame), but you only have to look at a price chart for 5 years to know that buying GLUU shares is a lot like buying lottery tickets, whatever one says to the contrary.
I guess journalism is a lot like fashion - whether its skirt length or something more complicated, there's a heck of a lot of ME-TOO-ism in both sectors. Yes, the first person who wrote in connection with the imminent King IPO - "Remember Zynga?" has a very good point to make..... But the next 5 iterations haven't really added a whole hell of a lot. EXCEPT that they are like GM's recent press - not fun reading if you're a shareholder.
And with a big run-up and the usual jitters that maybe King's IPO will smell like Facebook's (AT THE TIME), I'm sure lots of profits have been taken.
But think about it. Investors are always advised - wisely - that "past performance is not a ..." ... Now, we're in bizarro-land, where the fact that ZNGA either was overpriced when it went public or made very poor use of the funds it raised at the time or both ... are spanking it's 2014 shares. Makes no sense.
Well, a little - if you focus on how tough it is to come up with a good NEW idea, even if you had a wonderful run with some previous idea, you do what today's MF article does - ask how much is "baked in" and whether a nickel or dime non-GAAP earnings number justifies a $5 stock price.
But, I'm betting - literally - that those valid questions are NOT why ZNGA went from $5.80 or so to $5.15 today! Rather, a good deal of that move is accounted for by millions of shares being sold as their owners look in the rear-view mirror as they read this or that "commentary." They may be right "for the wrong reason," but given that their "reason" is ever so WRONG - i.e., wondering if it should have been priced at $13 for its IPO - it seems reasonably "smart" to bet the other way. If you guys get shares at $4.80, be sure to tell me what a p*tz I am.
One wishes that the bear/short posts were motivated by something other than per word payments - $1 per?
To recycle 6-month old news as if it's current is your usual trickery/fakery.... Now for a substantive rebuttal -
(1) Wake up - the U.S. is not the only game in town, probably not the biggest either. I'm beginning to think that when one of the 2 Chinese companies has its IPO, they'll make like FB with its recent purchase and look for something in the $5-30 Billion ballpark - hmm, isn't that ZNGA's "vicinity?"
(2) It's great to get in on the ground floor, but don't you think that Nevada is going to be just a little crowded, hence over-priced on day 1?! ... ZNGA's working the kinks out in a venue big enough and similar enough to NJ and 40 other U.S. States to make them an ideal partner for someone who knows how to buy politicians and licenses and "just" needs a platform.
(3) What the other guy said - they're keeping current and competitive in the high-level minor leagues - remembering that there really IS NO major league option at present. When somebody "calls them up" (from those minor leagues), you better believe that they will be - unlike baseball - a free agent, ... and they will have - both insiders and us - one hell of a payday.
I could be wrong, but Mattrick is your 2014 techie. Works hard, plays hard, is "in it" for the fun and the money. Not for him sticking at MSFT and hoping to elbow his way one or 2 notches up their corporate ladder. I figure that his exit strategy coincides with moves made to date - "If/when ZNGA stops tripping over its shoelaces, somebody is going to make the same decision FB has with its couple of serious acquisitions - makes more sense to buy it than start from scratch, especially since it's like an iceberg - most of its value is not visible to the naked eye!" That is, a $10-15 share buyout gives guys like Mattrick almost the kind of money that the insiders netted when Ebay bought Paypal. I'm happy at that prospect!
Excellent analysis IMHO - yes, it captures my thinking ... although there's also a nervous part of me that says that if you're right - and we have an "excessive" sugar high - i.e., let's just wax optimistic & imagine GLUU at $7, that might be a really good time to take ALL our chips off the table, ... at least for a bit.
Surely, you're smart enough to know the phrase "get ahead of itself." When you have to look out 24 months in a field where 3 months out has a best case and worst case scenario that look like "good" vs. "evil," too much optimism borders on crazy. Heck, it's only been a year or 2 since it seemed like smartphones would have only winners and colossal winners. I don't see much similarity between BBRY and either ZNGA or GLUU, but the 2 situations both have a hefty quantum of "musical chairs" built in, ... and the music could stop, slow down, seem to stop a lot sooner than one "expects."
Meanwhile, it's funny how some of the talking heads (minor league ones, some, but MarketWatch's Poletti, too) are talking down the King IPO. I think that this time Cramer has it right. If you could participate or buy in close to the offering price in the aftermarket, I think you'd have the day of your life. Now, let's hope that I'm right about that AND that the "halo effect" hasn't already happened! I don't think so - it's easier to view GLUU's pop to date as altogether justified by stuff that preceded the lip-smacking "King 'valued' at $7.6 B," ... but let's all remember that we may not be "the smartest guys in the room."
Most of the time, I subscribe to the notion that "everyone is entitled to their opinion" or "people can look at the same whatever thing and react very differently," but an article about Zynga that doesn't mention gambling - AT ALL - is like talking about Mariano Rivera and not mentioning his "cutter." (or Rafa's topspin.)
Soros and his funds have long bought the occasional "drug stock," presumably because they ran a gazillion numbers and found if you mostly buy the "better specs" in that sphere, the occasional 5-bagger more than makes up for no doubt the majority doing nothing special price-wise.
So, when he/they bought Zynga recently, you KNOW their outlook is the same as mine -
What governor (Cuomo in NY is fairly typical) would have a tough time choosing between revenue from gambling or revenue from taxes? (They SHOULD find this a tougher choice than they do, but that's another matter.) They'll opt for gambling EVERY TIME. Every legislator who simply ruminates "How do we separate our citizens from $ without their blaming us?" knows that lottery tickets are chump change as compared to serious gambling $, be it sports or cards.
And there you have it. Will Zynga be the Facebook of online gambling? Will it gain traction this year or next or ?? ... I hope no one is nuts enough to say, "Definitely!" to either or those or a handful of similar questions.
But - need I say it - stocks are like that! - you like a pony going off at 5-to-1 when you think he really has a 1-in-3 chance of winning. The analogy is imperfect, but Zynga at $5.3 could easily double or triple JUST ON improved PROSPECTS of being a major player in this arena, ... and I have little doubt that those prospects exist and will be publicized sooner rather than later! Plus, Zynga now IS focusing on metrics, monetization, etc. - again, not enough writers point out that a clown-CEO yielded to a capable one a year or so back. That's why the IPO keeps getting tagged "Stinker." Ancient history at this point!
Let's leave "Hamlet"-type posts to Will and people who do more than underscore the fact that there really is no certainty in stocks - least of all, ones like GLUU or ZNGA..... FWIW, I trimmed a lot on Friday - because one hears that "the big boys" hate to be too exposed over a weekend, only to read on Saturday, I think, That Warren said "DO NOT SELL based on one's very amateurish political guesswork."
Well, I got lucky in terms of being able to re-establish positions at or below where I sold on Friday.
But your lead-off is the one thing worth focusing on. King/CandyC will either goose a stock like GLUU quite a bit for all the obvious reasons..... Or it's a case of "sell on the news," i.e., GLUU is where it is now because of its resemblance to King..... It's impossible to filter out the element of wishful thinking, but I *do* go with the optimistic case. Remember - around here, it could be a novelty to half the readers - a great stock market thinker once pointed out that this is not a beauty contest where you gain anything whatsoever by picking who's the prettiest. Money is to be made HERE by guessing who the other viewers are likely to think is the prettiest gal up there..... On that basis, I think there are still people (including hedgies and fund managers) who will hear the drumbeat of $8 B valuation for King ... and/or up 50% the first day it trades ... and think (mostly logically), "Surely, there are 'denim jeans' that look enough like 'KING' but can be had for one fifth the price when you iron things out!"
And GLUU goes to $7.50 ... Yup, the furthest thing from a sure thing ... and if it should somehow play out as described above, who among us will be lucky enough (forget "smart") to either take that jump and spend some, reposition some ... or leave it "on the table" for the move to $10 or $12?!
Last thing - I read about Amazon and Google (surely, at least ONE of them will) going for a set-top box this year - probably 1st half.... GLUU would benefit mucho!
Thank you very much. Finally, evidence that even on a "bad board," some useful information can be exchanged. I guess - if this really *is* key in a nice move for TIVO today, and that makes sense - more people liked those really TWO positives. I guess it would be interesting to see how TIVO's type of customer - top 20 but not top 10, basically (at least the 1-4 that are public) - fared in terms of appreciation today.
I don't know. TWC is obviously a totally different buy than an entity 2% as large, but I agree that Charter is likely to part with some of its war-chest for "sloppy seconds." Amazing that Sprint is still "independent," for that matter - maybe, there still is an anti-trust "division," with one or 2 interns staffing it up.
Yeah - that's always amazed me, but I guess you can cut through some of the mystique (and/or manipulation) by thinking of that which most people buy where negotiations come into play - houses. There really ARE "motivated buyers" and the other. If somebody's landed a good job and has kids starting School September 6th, you better believe that the seller can use that to his/her advantage. By the time ATRO got to 54 today, it was clear that some combo of shorts covering, people wanting to add to their positions, etc. meant that holders could think and act, "Well, I *could* part with another 1,000 shares if you're ready to pay 30 cents more for each than just 'printed' "
But you probably know all this. Didn't hurt either that for reasons I don't yet have a clue about, we went from a little red to quite a bit of green!
Indeed I *was* tempted, thinking that - without ever having heard him/them utter a word - mgt would probably not beat the drum TOO loudly on a call, ... and maybe, folks WOULD decide that it had "gotten ahead of itself," much as it appeared to at 66 a couple of weeks back..... But, I *do* like 2 of Yahoo's numbers - heaven knows they have multiple sources and sometimes their lack of Q.C. works to the advantage of someone who ignores what's bad and circles what's good. (1) They use some service to "value' companies - heaven knows how tough that is, but given the run-up in darn near everything in the last year or 5, most stocks (using Y's "Key Stats" page) show up as overvalued, often by 30% or more, sometimes way more..... But a/o this A.M. (and still) ATRO shows up as "discounted." (2) the 2 growth numbers on the Earnings page look like they might be right and are awfully darn good for a "cyclical." Both are near 20%, ... and I sure like the idea that a few people who presumably are good with numbers are looking for ATRO to put together - on average - 5 years (going forward) of 20% avg. growth per year.
It occurs to me that one or both could be very skewed if the base year represents a trough, but I only do this "as a hobby."
I bow to your knowledge of the company - and maybe even how to "trade" it - but if those numbers are right (big IF, both in terms of did-Yahoo-goof? AND can-ATRO-deliver?), this is a 3-digit stock provided the market and/or economy doesn't tank.
Yeah, lots of uncertainty, but when "highly safe" translates into 1%/year returns, I'm willing (perhaps foolishly) to stick my neck out a bit.
I bought some at 52 & a bit more at just under 51. I'm new to the stock ... and if I knew more or had read more I might not have gotten so lucky. That is, it looked like fantastic revenues, but those acquisitions and Yahoo's very marginal data handling/reporting skewed things quite a bit.
But I really must take issue with your suggestion that cashing in some/all at 57 makes sense. Of course, it MAY, but right now, I'm hoping to stay a shareholder (with hoped for joy) for quite some time. Looks to me like an aggressive operation, but one "catching a wave." This looks like classic "food chain" stuff, and in due course somebody will gobble ATRO up - or it'll go private or whatever.
Last, any number that looks wrong on Yahoo probably IS. I haven't a clue about the revenue side, but YHOO is like ever so many companies - if they could limit the number of employees to mostly sales people, they certainly would. 2 or 3 of the "stock market" "journalistic" operations have switched over to a healthy (hah!) amount of computer-generated reports! ... Yahoo is clearly stupid enough to think that a gazillion numbers can simply be uploaded.... Well, I guess it's as simple as "you get what you pay for!"
Quietest darn board for a stock/company with what surely appears to be "rooting interest!"
Any of you longs have a clue ... as to how TIVO appears to be defying gravity. I got out yesterday at 12.30 and feel relieved, obviously.
I don't know how good the guys at "Systematic" are, but they surely did put down a big bet sometime near year end. I think it's safe to say that they don't expect the strinkeroo conf. call that I was (am ??) predicting in a couple of weeks.
I'll say this - fwiw. This stock will surely move 50 cents one way or the other during that time, maybe a dollar or more. I'd be shocked if its puts and calls had that much volatility baked in.
Again, you won this round ... for sure!
You guys - all of you - must be on drugs. Yes, Microsoft will need a little serious "tweaking" in terms of business strategy, but it doesn't need reinventing. It's exactly like IBM 20-30 years ago - they could live and prosper forever just doing what they've been doing ... and dabbling in growth areas with the gazillions that their cash cow throws off. A game company? - into gambling, jokes like Farmville, etc. GET REAL.
Mind you, I like Zynga at this point.... And none of you mentioned the one most obvious potential buyer - FB. Talk about a company that "gets it," and you can flesh out the "it" the 2 or 3 ways that make sense!
And don't you "mobile is everything" one-noters ever learn? By the time that it's "obvious" that this one has the others beat cold, one of the also rans or some newbie is hard at work to come up with "the next big thing."
WIll Google Glass figure into it? Certainly thought control is no longer the stuff of science fiction.
There's plenty of room - and reason! - for all 3 of mobile games, desktop-based ones and console-based ones. The 3 won't grow at equal rates, but watch out thinking you can even pick from the 6 ways those 3 guys could rank on this or that scale, much less pick the company in the winning category, much less buy it at the right price and sell it at the right price.
Don't forget the poor BOA/Merrill guy earlier this week - even if he'd like to forget this past week. Even the best strategy requires darn good execution, and have we really seen any evidence that Boy Genius CEO is as good at growing as he is at cutting?! How much future success is "baked in" at this point? I play tons of Words With Friends, and it is truly pathetic what a bad job Zynga does with a product that COULD make them some serious coin. Face it - half of Z's market cap is predicated on gambling going online and it proving to be a winner there. Again, I happen to like their chances there, but too many posters have lost touch with reality.
Good one.... I know I suffer (and pay!) for my inability to hold stocks "long enough," but what ARE you thinking?! ... I say this "with affection" - obviously, "she's done you wrong," but the real question is - are you throwing good money after bad at this point. I'm not talking about "doubling up," but just to hold this stock into earnings that might be like adding some veggie to a spinning Cuisinart strikes me as masochistic. You can't enjoy losing money, and that's what I'm predicting.
If you're still a "true believer," of the type that says, "Dammit, there's absolutely nothing that more people spend time on in greater amounts than TV and Tivo enhances that experience," consider getting out of the way of the bad earnings luge or garbage truck and buying back any stock you sell at a dollar or 2 or 3 less.
Yes, as much as possible Tom will attempt to drown out a ton of bad news - "we've given up on what's made us almost a household name because times have changed" - with b.s. about how now they're a 21st century software powerhouse.
You must know how conference calls work. Analysts tend to be respectful, but I hope everyone is muted while he talks, because laughter would only be exceeded by shouts of "YOU LIE!"
I believe there was a company called Zapata - once something in "energy" - that tried to reinvent itself in the late 90's (Internet "boom years") as an internet company. It's as if Charmin said that they "got it," that T.P. is no longer a viable product? ... and they were morphing into a waste management company?
Make no mistake - Tivo is essentially leaving a biz where it's #1 to bump heads with Apple, Amazon, Google, etc. ... This isn't a close call. 99.9% of the smart money will back Goliath (or the 3 of them, absolutely all hell-bent on decking Tivo) over David.... And rightly so! (Plus, you wouldn't even get a hundred-to-1 payoff if Tivo were - miraculously - to prove equal to the task.)
I passed on Google, ... and I suspect that it looked then a lot like TWTR does now. Yes, the PLynch in me shoulda kicked in, since Google had become my 6th finger - not so TWTR - but I'm sure you know intuitively what happens if you can grow 50% a year for 10 years. (And *I* admit that that's harder than hard. Again, I only mention TWTR because when one is heading toward the sidelines - sometimes absolutely the right place to head - one does well to see if there's something going on while your back is turned. I submit that it's GLUU almost surely "coming into fashion" along with spring. And really - "IPO price" - we all know what a joke IPO pricing is. Insiders have a cost basis of maybe 10 cents/sh. They know that what separates a billion market cap from $100 MM in their biz is a good call or 2 and/or a ton of luck. If ZNGA were to offer $6 over the weekend - no, could never happen, I don't think - a deal would get done at $7.50 or less, whether with Z or a "white knight."
I'd give you the last word - although you mostly repeated what you said initially - except that you ARE smart & this IS interesting. First, my only short is TIVO, and while all shorts have elements of it, I think your call on TWTR is just your "gut" talking. Of course, the Peter Lynch approach is better than most, but it almost never pays to narrow it down to just your immediate family. I can't tell you how many people I see playing that Candy game on their phone in NYC. There's a cute note in Marketwatch's "daily update" today about a moronic game with "birds" in the title. I'm ambivalent about every saying "superior" things like "Never underestimate the stupidity of the average person," but with mobile games, I think that simply must be said. So, I try to be rational and assume that people with way too little going on in their lives actually think that playing "Floppy Birds" (that's it) is better than reading or meditating or ... pretty much anything else.
It also bugs me - as it does you, I think - that companies "get away with" reporting that emphasizes the numbers you get when you leave out "stock compensation." If the SEC had teeth, they might weigh in on that.... BUT profitability really is secondary to things like marketshare and penetration and hiring good people and ...
I'm not sure I'd go as far as Amazon and its lovers do in terms of never seeming to be able to turn the corner, but this is like Sony getting out of the PC market yesterday. There aren't enough chairs for 3-5 "big players," so make sure you're not one who goes 6 months without a hit. That's expensive, but we all know that GLUU's payday comes on a buyout, not when they can declare a 10 cents quarterly dividend with the expectation that they can grow it from there.
You obviously have a very good handle on GLUU - how you came up with your numbers is almost less important than your accuracy, ... but I do part company with you re "playing it" at this point.
As with Zynga and a ton of other "fallen angels," either they've reinvented themselves ... or find themselves REALLY well-positioned in what is/may be (big difference, I know, but sometimes perceptions matter more than reality) a very hot "corner"
... or - see Twitter, FB 6 months back and a host of others - the REALLY smart money knows that they've just picked off some low hanging fruit and the stock is WAY overvalued at present.
I come down on the side of the bull case, here, and I admit that the word "bull" troubles me.
Somebody on Seeking Alpha wasted even more words than I usually do writing about Ubi Soft - wasted in that he couldn't have more than 100 readers, total - and he made a couple of points about China that resonated.... I don't know when (if ever) they'll have freedom of speech ... or cars (I'm talking about the hundreds of millions of families in THEIR "middle class"), but game consoles and phones they will have ... and to me that puts companies like GLUU on steroids! (in a good way.) ... Again, if my perception is accurate and comes to be shared by even a few hedgies or funds, you'd be insane to be short at 5.25 or so.
Yes, the 2 or more bubbles which burst in the last 15 years should inform one's every decision, but there's also many a lesson to be learned about how/when things get ahead of themselves. That is, GLUU at $10 MIGHT be insane, but it's not insane to imagine that they'll get there - in a hard-headed sort of way.
So, I guess we just differ a lot about what constitutes being over-valued for this stock/company.
Again, kudos on a great call - and you obviously know that it's never really nuts to book a profit of the type you were able to log!
If it's got some heft - especially - there's a sound when what's left of the connective wood tissue that sometimes elicits a "Look out below!" cry.
We've all seen this TIVO movie before - last quarter - when for every 5 cent move up, you could point to (by day's end or week's end) a 10 cent move down. Good days for tech, bad days, the tape told the tale!
And it's happening again. Who hasn't heard the classic definition of insanity - "doing the same thing over and over again and expecting different results." ?!
Pattern recognition has its limits, ... and history doesn't always repeat itself ... but nothing's different a mere 3 months later. TIVO is gonna disappoint. Plenty of "big guys" have gotten the word - believe me, Goldman's "avoid" (whatever they said when they stopped saying, "Buy" was literally "THAT WORD," but you'd have to be naive beyond belief to think that the "whisper numbers" are not the same as what poor Yahoo prints.
I'm not gloating - and I (and all shorts) could get badly burned - but if you don't smell smoke yet, better see an E-N-T guy in a hurry!
Very solid post. I'd only add that there's enuf nervousness about the market and tech - yup, "this week" (which I add because it may just be "noise.") - that there are probably analysts who have all but hit the "hold" button (and not on their phone!) ... and would need to hear some awfully good news (borderline "pumping" from mgt) not to press/click/send/whatever - i.e., try to be the first to advise clients out (or at least look like they had good insight re the earnings & call.)