A decent article on this issue - which is germane to ALOT of companies, not just TTWO - is "Stock compensation rules mask true operating performance" by Stephen Ambler.
Yes, management definitely likes that stock-based comp is excluded as an expense in Non-GAAP numbers - since in the last few years even on a Non-GAAP basis about 40% of quarters were losses. Thus, they must dilute with stock-based comp otherwise management couldn't promise annual profitability on a Non-GAAP basis for the foreseeable future.
Pitchford said "Battleborn is the most ambitious video game that Gearbox has ever created.” I read that to mean it's more expensive to make then BL2, which probably puts the budget at $40-50 million.
Did more research and it looks like they bought about 17 million shares in FY14, which explains the propaganda as, but for the buyback program, they would've diluted the float by 13 million shares. Now they're trying to convince longs to let them do that again - to offset that potential dilution today would take $290 million in buybacks.
Homer - Am I right that you're saying that having 2k work and Gearbox consult on BLPreSequel is a good move? Or are you saying that this Battleborn MOBA is a good move?
TTWO's most recent SEC filing is basically marketing material re: why TTWO management needs more equity grants. According to it, "Our y-o-y fully diluted share count was reduced by more than 4.2 million shares in FY2014." I honestly thought it was a lot more than that. Anyone?
Other than that they are generally free-to-play rather than retail, I know nothing about MOBA's but with BL being GearBox's only solid IP in the last several years, I'd say your concern is legit (e.g. Duke Nukem Forever and Aliens: Colonial Marines).
Hopefully, this isn't the "groundbreaking new intellectual property" Z referred to in May 2013. Around then too Slatoff teased “And we also have an extensive pipeline of unannounced titles in development which you are going to hear about in the future months,” so far I count this is and Borderlands:Pre-Sequel.
A strangely early announcement with a wide release window especially since BL the Pre Sequel was officially announced 3 months ago. FYI, Gearbox is assisting on BL the Pre Sequel. Definitely a good thing that this new IP is ahead of the Duke Nukem Sequel.
It sounds good, but I don't know how feasible it is. Maybe that takes it into FY16 or the risk/reward ratio doesn't justify it; I've no idea. On it's face, I agree except that Evolve doesn't have an old gen release so it doesn't seem to hurt it to push it into Q4.
IMO GTA V next gen or PC is a Sept 2015 release, otherwise Q2 looks like Q1 and FY15 has a rough start (that's not "priced in"). That only slips if R* cannot get it out. IMO it's down to BL or Evolve of something gets kicked, and since the former is old gen and latter is a next gen new IP, it makes more sense to kick the latter.
frb you really are a jag. You take shots at anyone who disagrees with you and go into a 2-4 post riff with them. It's like you've got a bad case of Napoleon complex or something similar. Relax, be positive.
Go read Z's propaganda today and post the heck out of it. Feel free to keep telling us how it was Z's strategy to release GTA V next gen and DLC a year later and how releasing TTWO's 5 biggest IPs of FY15 in the same 4-6 weeks is a great strategy.
TTWO has never milked any GTA IP. Perhaps you should survey folks to see if anyone believes it was Z's strategy to release GTA V DLC and next gen a YEAR or so after releasing GTA V?
You may disagree, since it's your nature, but not having GTA V DLC and next gen released by now is a definite failure.
You are so full of it. You just fabricate stuff. And besides BTW, if you're going to quote me stick with my full quotes instead of trying to mislead:
"Evolve is a question mark, no major downside, but it's questionable as to its contribution." 5/14
"As for Evolve, I was asking for you to quantify your thoughts. If I were long, I'd be happy if Evolve could generate $0.20 in non-gaap eps. I agree with you that there's very limited downside given the THQ bankruptcy purchase price" 5/13
"Agreed. New IP, new genre, THQI imprimatur, cheap bid, etc. All reasons to be cautious and not throw around numbers over a million. That said, I think it's likely the game is contributes positively to FY15 EPS, I'm just doubtful about claiming it will do that significantly." 2/11
"That said, the guy who says Evolve sells at least 4M, is bonkers; that's a major longshot." 1/14
Kidding about what? I don't see me "declaring evolve a flop." I see some of what I said, which is what I said it is, breakeven to 3 million (max) and a big question mark.
I also see you with FY15 EPS over $1.06 and Evolve will be a hit, which I will assume puts you in the 3 million+ category.
The cheerleaders here don't like that bud but I agree. I continue to put the chance of meeting FY15 guidance at 40%.
GTA V next gen or PC must be shipped by 9.30.14. Q2 ends 9.30.14 and has a 0.09 EPS est. If GTA V is not released by then, Q2 = Q1 (-0.26 EPS est) and TTWO starts the first half -0.40 to -0.50 and would never make $1.01. Z knows that and will get GTA V out in September, which should raise Q2 guidance, but not FY15 guidance.
In that case, the test will be whether the release everything else in Q3 strategy works. I don't think it will given the slate of games competitors are releasing then and ramping next gen console sales. Thus, to me, a December surprise is not out of the question, unless guidance or downgrades take it down sooner or Carl or his kid's new hedge fund want shares.