Sentinel, it is much higher than $ 30, Posted by: wickw50
In reply to: None Date:4/14/2006 10:37:55 PM
Post #of 152276
In doing what some consider DD, many on this board, in their enthusiasm, have approached sources from the position of "Hey, guess what I know and why don't you know it?", when in reality they should develop a trust with the contact. That is done by being humble, sincere and trustworthy. When the source knows they will not be called out on the public forum one can gain vast information. Here is an example....and no,...... you will never know who this individual is....
Q: How deep is the relationship between GZ and CC?
A: Highly unlikely that Phil Schoonover or any other senior executives have more than a cursory knowledge of who GamezNFlix is unless CC took an investment stake. It is possible that CC took an investment stake, but if so it would be fairly small and I find it highly unlikely. They are investing heavily in refreshing their real estate and updating some major systems. Most likely the games merchant put together the deal and had it approved by the entertainment senior merchant and that’s where it ended. Hundreds of deals like this are cut each year in many different product categories. GZFX is not nearly important enough to CC to be a strategic partner. This status is more reserved for companies like Microsoft, Apple, Sony, Samsung etc. They are likely on the lowest supplier tier within CC which means they’re just above probation.
Q: What do you think the terms are?
A: Many have speculated on the amount that CC is likely taking in each transaction. While I can’t say with first hand knowledge, it is most likely that CC is getting at least 2-3 months of each subscription. This would be consistent with most deals done like this with large retailers. Most retailers, Wal-Mart included, operate on an ~15-18% gross margin going out of the store. When it comes to service deals like this, retailers don’t have the desire or processes to deal with royalties or commissions, so I would expect CC to get 15-20% of the customer’s annual spend as margin upfront which means 2-3 months. **** So the $30 that is being posted is
(LIKELY ACCURATE OR EVEN ON THE LOW END). If CC got any less, then they weren’t doing their job for their stockholders.
Sentinel, the post was for those that will say, " look at all the cash they have ". The cash from selling of shares part needs to be taken out on all formulas.
