| To: Scott Miller who wrote (66) | 3/21/2000 7:50:00 PM | | From: Schiz | | | |
Seeing as there's nothing else going on here, I'll try once more.
I borrowed my copy of sarge n64 to two people I work with. Both liked it and subsequently purchased it. One of them raved about how fun it was.
You should watch the sales charts more closely. Sarge n64 was in the top 5 rentals for quite some time. It was also in the top 10 n64 games for a while too. I think it was at #2 for a couple weeks, second only to pokemon on the n64.
3d psx was on at least one of the monthy psx charts last year around this time. It also made it back into the top rental charts around christmas. Army men 1 pc was in the top 10 under $20 titles around christmas. I think am2 pc was relatively successful too. 3 (toys is space) was pretty much a dud, it didn't take long for it to be <$20.
Might and Magic & Heroes of Might and Magic are both still going strong.
You say 3do goes unnoticed? Take a look at the 2 year chart. 3do IS getting noticed.
I'm betting that this is just the beginning.
I have to admit that sarge psx isn't selling as well as I had hoped (at least it doesn't seem to be). Also, they've been moving up the npd charts but they only moved up one spot on the most recent charts. It's better than moving down but if they're going to make .38 per share this quarter, they will need to move much higher on the charts. That is, assuming the charts have accurate information.
Europe is an unknown though but I haven't seen anything that would indicate blockbuster sales over there.
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| To: Schiz who wrote (67) | 3/24/2000 2:00:00 AM | | From: vc21 | | | |
Ken,
How in the heck do you expect 3DO to make .38c this quarter? And while you're at it, please explain to me how 3DO is valued 33% higher than THQ. We made 32 million last year. 3DO will be happy (and lucky) to break even. I'm really curious where the analysts got these numbers. Or did Trip forget he is supposed to warn?
To make .38, you'd need 16 million net. Last quarter, during the holidays no less, you made 1.4 million on 40 million in sales, a paltry NPM of 3.4%. Now, let's say somehow you can get that NPM up to 10%. You'd still need 160 million in sales or 300% more than what you did during the holidays. I just don't get it. Please explain what I'm missing.
Thanks,
Vic |
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| To: vc21 who wrote (68) | 4/5/2000 1:13:00 AM | | From: Schiz | | | |
Vic, my apologies for not replying sooner.
I don't feel that .38 is in the bag but if they are to make the .38 I would expect them to do it by keeping operating costs flat or slightly down and obtaining a good amount of sales in Europe. Looks like thqi passed thdo up on market cap recently but as I've said before it's difficult to compare the two because they are much more different than many would believe. The fact that thqi relies heavily on outside licenses and outside development while thdo relies on home-made brands and in-house development is enough to make comparisons very different. Among other things, thdo is growing revenues at a much greater pace then thqi. They don't have the track record that thqi does but they do have Trip and the rest of the management team. Don't forget what Trip did with EA back in the early 80's. Granted, the industry is probably not as wide open now as it was then but EA was an innovator back then and with the next generation consoles being internet capable, that really changes the landscape quite a bit. Who will have the vision to create the innovative content that will drive success 2, 5 or 10 years from now?
I don't feel that luck has anything to do with thdo breaking even this year. They would have to miss the numbers by quite a large margin to not make a profit in fy00. As far as warning, you are assuming they won't make the numbers. It seems obvious by the recent action in the stock you are not the only one that feels this way. I don't think whether they come in a little over or under the q4 estimates has much relevance in the big picture. I'm more interested in what they've got cooking for the ps2 and their internet plans.
You are looking at the math in the worst possible light. You need to realize that an increase in revenues due to more games released doesn't correlate directly with operating costs. A very large portion of their operating costs in the 3rd quarter were from television ads. I would expect this to be lower this quarter. I would think it might be low enough to offset increased development and g&a costs. NPM of 3.4% when you are growing revenues at 200%+ is not paultry!
We will know the fy00 results in early May. Until then we'll just have to wait.
If we don't go any higher before earnings are announced I wouldn't be entirely surprised to see the stock trade up after earnings even if we miss the numbers. The future is much more important than last quarter.
You said "I just don't get it. Please explain what I'm missing."
I've been saying that about yahoo for years. Too bad I wasn't buying instead. I'm not saying that thdo will rise anywhere close you yahoo. My point is that stocks that appear over valued tend to stay that way, especially if they are that way for an extended period. Sometimes the value is not immediately evident. I think it's likely (obviously there are no guarantees) that the biggest reason thdo is down is the weakness in the overall market and the sector itself. This could be a real buying opportunity here. Although there are what appears to be other buying opportunities within the sector as well. Currently I really like thdo and atvi. ttwo and thqi are worth looking at but I don't watch ttwo that closely and I'd like to know more about royalties associated with wwf and if the capitalized software costs on the balance sheet are real for thqi. erts tracks the overall market much closer than anyone else in the sector so it's a little scary from that standpoint but the aol deal seems real promising and we could see a considerable pop with hype surrounding the launch of ea.com. I guess iply might work as a crap shoot. I wouldn't touch aklm with a ten foot pole. gtis I don't pay much attention to. mwy is kinda interesting. Probably second as far as tracking the market but I'm not crazy about the arcade business in general. I would think it's much more susceptible to a downturn in the economy.
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| To: Schiz who wrote (70) | 4/5/2000 2:09:00 AM | | From: vc21 | | | |
Ken,
You're a mensch. Thanks for the civilized debate. You being civilized, me debating. I don't see how 3DO does .38 regardless of marketing expenditures. Furthermore, you cite Trip and Co as a great management team but with those NPMs (and in-house development), they can't shake a stick at Farrell and Co. There is currently a 10% market cap gap in 3DO and THQ. I still think there deserves to be a greater gap. (And yes, I am a POed THQ shareholder. I don't know how a company growing 30% a year has a PE of 11)
Also, I don't quite agree with this great divide you see between 3DO and THQ. Yes, one is in-house and the other (out-house?) licenses and outside development but c'mon Ken, they are videogame companies, pretty much pure and simple. Trip should be able to get higher NPMs than THQ with his strategy and he can't cause either he's buying revenue via marketing or he doesn't have control of costs. Either way, I wish you the best of luck with 3DO. I hope it goes high but I hope THQ goes higher because I think it deserves to be higher than 3DO, (nothing against you). I used to invest in 3DO in the mid 90s. From there, I found out about THQ. And that's made all the difference.
- Vic |
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| To: vc21 who wrote (71) | 4/7/2000 3:13:00 PM | | From: vc21 | | | |
Here's the batting order:
1. ERTS
2. AKLM
3. THQI
4. EIDSY
5. MWY
6. ATVI
So far, the only one to get a hit was TTWO.
Next at the plate -- The 3DO Company. |
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| To: vc21 who wrote (72) | 5/7/2000 4:00:00 PM | | From: vc21 | | | |
Well, looks like 3DO came to the plate and struck out. I added a Interactive Entertainment Portfolio to this subject which can be accessed by pressing portfolio in the upper right hand corner.
Regards,
Vic
Interactive Entertainment Portfolio
siliconinvestor.com |
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| To: vc21 who wrote (73) | 5/8/2000 9:51:00 AM | | From: Professor Dotcomm | | | |
You have constructed an interesting interactive entertainment portfolio. My own is about the same (I am missing NVDA & TDFX) but I also include the accessories companies which are more and more important with the increasing sophistication of the new consoles - my choices here were RCOT, GIG and RADA. I also include ELBO and IENT.
In a separate section I follow the European companies such as IFG FP (together with its subsidiary GTIS), UBI FP, GUIL NM and RGE LN. |
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| To: vc21 who wrote (73) | 5/14/2000 8:41:00 PM | | From: Schiz | | | |
Vic, I have to disagree.
I'd say it was a solid base hit. While they didn't make the old estimates, the old estimates were a bit overly optimistic. Big picture looks very good. Revenue trend looks excellent 10mm in fy98 (i think), 48mm in fy99, 122mm AND PROFITABILITY in fy00 with 210-215mm in revenue and .50/share earnings estimated for fy01.
Yahoo still shows .50 + eps estimated for fy01 and 40% estimated 5 yr growth rate. Put a 40 pe on .50 per share and we could easily see $20 per share within the next year.
Factor in possible additional upside in earnings and revenue combined with the possibility of over-valuation and $20 may seem cheap a year from now.
On the other hand if they underperform then we might not see $20 at all.
I'm banking on making or beating current estimates and being at least in the high teens, if not much, much higher by this time next year.
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| To: vc21 who wrote () | 5/25/2000 11:14:00 PM | | From: Schiz | | | |
Pretty darn dead around here lately. I Guess with the state of the industry, that should be expected.
Just wanted to recant a previous statement I made. I once said that I would sell some thdo and buy some thqi if I could get it at the same price. If I do that, I might as well just buy aklm and get in apartment on the top floor of a very tall building.
My condolences to thqi longs.
and atvi longs
and mwy longs
and...
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