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Nice volume. Maybe that recommendation will help us takeout the 52wk high.
A 25-35x multiple is definitely more reasonable. 25 maybe more than appropriate for now and 35 when we show that top line growth. Being in now when the multiple is below 15 is a nice feeling. I've been holding my shares for a long time. Bought a couple grand more this week. Plan to be holding for a long time to realize the true value.
Ok, now Roth will have to play catchup.
Deal with Sci Games is dead. They went and developed their own product after seeing the success of EGMI's cards. We have to wait for our licensing deal w/ SGMS expires before we can market in Italy, Mexico and US.
I'm not as concerned because unless North Korea has a death wish, they have no regional allies in this matter. Seems more like attempts from the current regime to extract aid for their failing reign. From the US standpoint I think we have little fear of North Korea as a military opponent, however the fear probably relates more to providing weapons grade enriched uranium to some other foreign nemesis.
You also fail to recall that only 25% of GRVY's revenues comes from Korea. While Korea and other Pac Rim country economies have contracted, they have more of an ability to bounce back due to higher savings rates. If GRVY was selling primarily to US consumers I would be worried, since the US consumer is so overstretched.
Might not be a lot of catalysts over the next few months except for 3Q. They still have about $2.06 in cash and short term financial instruments. If they are able to stay cash flow positive they should add to that cushion in the next quarter. They've earned .24 cents in the last three quarters, so overall the investment is actually more compelling than it was when I first got in. If I was a good enough trader I would have been able to get out in the 2.50's, but that's with my rear view goggles intact. I'll be sticking around for Ragnarok II when it comes out mid-2010. I would believe if things are progressing with the release they should start marketing this product to generate attention in early 2010. I've got enough of a cushion to allow me to wait. I will update when I see anything substantial.
Nice trading. I agree w/ that theory especially when the company is still able to generate earnings and add to that cash hoard like they did this quarter.
Earnings/Revenues are impacted by currency. I did not think they are going to post better earnings than last Q. Last Q had some JPY appreciation built in to revenues. I'd like to see the breakdown in revenues by games, but we don't get that in the Q. What I do know is that Requiem is a fairly successful game. One main gaming website that has over 300 of these MMOPG rated has the game listed as a top 10 free to play game and top 25 overall. The question is how successful are they at converting that to a revenue stream, since the players pay for premium features. We know that their main property Ragnarok is a fading property and the key is for them to finally get Ragnarok II out. Given all the delays, maybe the mid 2010 date is an actual launch date. I think the stock has already discounted their launch given that this trades barely above cash value. Being a former video gamer, I'm sure they will win back some of their former fan base. The loyalty to a game is strong enough where some will switch and stay.
Not a trader, so can't say I have a good feel. Though with Ramius exiting completely and Moon decreasing their stake I think this has held up fairly well. I think sub-2.00's would be a good opportunity if nothing else is going on in the market. Don't forget that if they are cash flowing anywhere near last quarter, this cash position will enlarge from end of 1Q figure of 1.89/share and could very well be over $2.00 per share. This keeps the value proposition in place from my perspective. GLTY.
Ramius sold into the rally. They were long time shareholders in well above current levels. They were activist shareholders w/ Moon.
http://sec.gov/Archives/edgar/data/1050154/000092189509002343/sc13da1406297047_08202009.htm
Curious timing on the disposition. Ramius has had some issues, looks like their AUM dropped about 50%, but that still means they had over $7bb in AUM. Maybe they just got tired of the fight, since they have been in it over 3 years.
I just find it interesting that Ramius and Moon, both large institiutional hedge fund managers with an activist bent do not manage their investment better. As michael t pointed out, the company didn't put out in their earnings releases, something as simple as an EPS number.
Link w/ preview of a Korean game market report.
Key point: "The robust revenue growth for these game operators, despite an economic downturn, demonstrates the resilience of online games in Korea." They claimed the market grew 20%.
http://www.pearlresearch.com/files/PearlResearch_OnlineGames_Korea_July2009_PressRelease.pdf
Link about Korean MMO's in Japan and their retention rates. A little old, but backs up theory that when Rag II is released we can convert over a good amount of the players. Bringing back the past players will be the challenge and the reward.
http://www.gamespot.com/news/6147395.html
Link about growth in MMO games market. Last year the market grew revenue 22% in Europe and NA. Can we say growing market in a recession?
http://www.screendigest.com/press/releases/pdf/PR-LifeBeyondWorldOfWarcraft-240309.pdf
Link from some news service.
Not exactly insightful analysis, but maybe a source of some of the activity.
http://www.todaysfinancialnews.com/international-investing/international-small-caps-size-doesn%E2%80%99t-matter-9809.html
HWG: NYSE: Hallwood Declined To Comment On Unusual Mkt Activity
I guess they didn't want to say this was all caused by some computer jockeys on a investment forum.
52 wk closing hi and near hi volume. Just short again of getting the exacta.
Notice the volume? 796k so far. Is that you just picking up your nickels and dimes many times over today? We could have a record 52wk high and a volume high.
I have no idea where the stock goes in the next 5 mins let alone next week. 2Q will be telling if they should garner a valuation closer to their more well valued peers. I can say I'm looking for more than $3 from this one right now, however the story is fluid and always changing.
GRVY @ 2.56. You made some nice coin on that trade. Your good at this active trading stuff. I haven't tried to do much active trading. I just pile in with a big position and sit & wait. I bought a bunch in the 1.60's and made this a 7.5% position. Than I got further along in my due diligence and wanted to buy more, but it has really run up too fast for me. Should've bought anyway because I still would have made another 25%. Oh well.
How's the $$$ packed in the back of your GRVY mobile doing??
You bring up currency risk and bring up devaluing currency issues. However the example you use when the peg was broken is a poor example. The devaluation was not caused by the breaking of the peg. The currency was already weak and Korea did not want to support the won peg anymore so they let it float and the won proceeded to depreciate. This time it is already floating, so the devaluation risk is not present. I won't get into the banking system issues, but Korea is much better positioned than most of Europe or the US.
USD may not devalue immediately because it is a freely floating currency, but look how it has performed versus EUR, JPY, GBP and CNY. CNY has been a managed appreciation, what happens when they throw in the towel on the US? The one major currency issue is the Chinese Yuan/USD peg. China has a boatload of their currency invested in USD. What happens when the Chinese say enough with worthless Treasuries? Sell USD and buy yuan and the peg is broken. I would rather own KRW assets than USD assets when this happens.
On top of that over 50% of GRVY's revenues are JPY. JPY has appreciated against the USD. 25% is KRW revenues and the rest a mixed bag. I may be American, but our system is broken. There will be a shakeout. I have a lot of my assets in non-USD denominated assets, or in companies that do a lot of business outside US.
In terms of economies, I think the Asian and emerging countries have a lot more going for them than the US. The financial system here and in Europe is a wreck. Therefore growth in companies in the emerging economies will be better. Japan may be the one of the developed economies that are better off. This bodes well for GRVY. They are more of a pan-Asian company. Very little of their business comes from outside Asia, though it wouldn't be a bad thing if they made more of a presence in the US.
Closing in on the 7/8/09 high of 1.16 million shares for volume and a 52 week high. I'm not a trader, but is that a positive sign?? ;)
To some extent I would disagree about the China/Korea effect. I was checking and I do not see this stock trading on the Korean exchange. Am I missing something? Than the other thing is that the majority of the revenues comes from Japan.
Join the GRVY Train...
http://investorshub.advfn.com/boards/board.aspx?board_id=15836
That was my initial reason too. Clean balance sheet and nice cash hoard. Also like any software maker the margins can be huge if they can develop the user base. GRVY used to have a huge user base for Ragnarok, but now making do with the remaining diehards. The good thing is that they have already delayed the new version several times, so the ability to disappoint is very low.
HWG - Some move over the last two days. Took a 2.6% position on this and it rapidly grew to 4.3%. Still holding.
Hat tip to hweb2.
You shy? Hahahaha...
Nothing to be shy about GRVY. They USED to have a great game in the original Ragnarok. The thing is that the rate of defection has slowed and hopefully has bottomed. They've got a couple of magic rabbits in the hat, hopefully one will impress the gaming audience. I'm holding for that possibility.
Requiem seems to have garnered a nice audience, which is separate and distinct from Ragnarok. Given the mature theme of the game, I think it appeals to a different audience than Ragnarok, which is anime based. Reviews have been favorable. They posted a nice increase in revs with Requiem, though still small. It only came out last year. If they can build a critical mass with this property, than they have a new revenue stream besides the Ragnarok property. Couple that with Ragnarok II release and recapture of some of the old audience and we have a grand slam. I'm getting ahead of myself with these thoughts, but that's my vision.
Is your response some form of the efficient market theory?
I have some homework for you. Read some of the posts, read through the IBOX, read some of the financials, look through their competitors financials, review their products and see how they compare to their competitors. Sure there may be no new material information, but the current information has become material to me. It may also become material to deeper pockets as well. If it sells off with no material info, all the better.
The rationale for me selling was I got a little weary of the revenue growth after reading their 7/29 update of their growth forecast. They said revenues growth was already slowing. Than to back that up they gave revenue guidance with no implied increase in revs for 3Q and 4Q. The kicker for me to sell was when their expense numbers blew my estimates out of the water. With no ability to guess the expenses, I figured I should be cautious and got out after the 10Q was reported.
Still keeping tabs on it, but my affection for the company has waned.
What is the San Francisco Money Show?
Good question.
http://www.moneyshow.com/SFMS/main.asp
I wouldn't mind going, if I was in the area. Anyone ever go to one of these events?
About 2/3rds the free float has been traded in August so far. Not sure what that means, but hopefully some of that moves into more sure hands. Out of the big shareholders, it seems like Moon & GungHo have been buyers. Ramius may be selling considering they have pared some of their position already.
Glad you've decided to hold on, especially as the board moderator. ;)
I do little trading, as I know little about technicals or tape reading. Any reading suggestions as a former trader? Most of my buys are M/T to L/T holds, since I have a day job.
If management can string a couple .10+ quarters, this stock could be a double or triple from here. They have proven they can squeeze expenses with the most recent quarter. Even if they up R&D to maintain their games it's a small enough expense to not seriously impact earnings. If they do the same with 2Q than I'm hoping it is enough to take us to double or triple territory. To be a home run they need one of their recent or pending releases to take off before Ragnarok dies off. I see this as necessary so they don't have to dig into the cash hoard. An added benefit is they are a non-US company if you are looking to avoid the US/Europe related economic issues.
Does it help to have the chart in the IBOX? If so how do i set that up. I'm a newbie at this moderating stuff.
IR Contact.
Out of curiousity, how did you contact IR? Phone or email? Were they very responsive to questions? I sent Yoon Joo a message with some questions on expenses two days ago via email and have not heard a peep.
Analysis of Free Float:
Total Float is 6,948,900 shares or 27,795,600 in ADR's.
Shares locked up by top three shareholders are 5,052,850.25 shares or 20,211,401 ADR's (72.71% of total).
Free Float is 1,896,049.75 shares or 7,584,199 ADR's (27.29% of total).
Roth finally coming around and acknowledging their conservatism. Expectations for 40% growth? Hello? Is this thing on? Growth from FY07 to FY08 WAS 40%. They are on pace to booking that this year. This company looks like an earnings machine.
"despite expectations for 40% earnings growth in both FY09 and FY10."
I'm gonna be a little ABish here. I'd like to see them translate these agreements into revenue. One or two blowout quarters and we may get the multiple we have been hoping for. Roth seems to believe it is starting in 4Q09. We'll have to bide our time.
I'm impressed with the new contracts. I will be very impressed when that convert into lots of GameCards sold. I will be ecstatic when at 10 bagger territory for my entire portfolio of over $3.65.
My only peeve is they missed the Xmas selling season with Thomas, though next Xmas would be really interesting if they can combine that with the Moscoe relationship so these things can be in the Target store nearest you! That is my vision of sugar plums dancing in my head.
Nice contract. These are the numbers from the contract.
EGC will be entitled to royalty fees that will range from approximately 20 to 25 percent of the gross selling price of the EGC Electronic GameCard(TM), the EGC Electronic iQuizCard(TM), and EGC Edutainment PLAY Card. EGC will also receive a minimum guarantee in royalty fees of $200,000 annually. All royalty payments will be made to EGC on a quarterly basis within 30 days after the quarter concludes.