GRAVITY CO LTD SPONSORED ADR (GRVY)

[michael t]

I've posted some dd on GRVY on another board that I've reproduced below,


Post #1
-The stock currently trades at 1.53.
-They have Cash and short term investments of 1.89/s
-Stockholders Equity of 2.31/s
-1st quarter eps of .15 versus a prior year loss of -.13


GRVY is a Korean online game developer. This is a NasdaqNM stock. They are audited by PriceWaterHouse.

They have two games under development which should launch in the near future. Ragnarok Online II is the second version of their primary revenue generator and Ice Age. Ragnarok Online II is expected to launch in the first half of 2010, and Ice age is expected to launch in the fall 2009.

The company's press release didn't include an EPS calculation, and they released it on the GlobeNewswire.

The company has 27.8 million equivalent ADR shares with just over 7 million float.

I like the risk reward profile.

Post #2

Another followup note regarding Gravity. The company holds a 16% in interest in Online Game Revolution Fund. The fund invests in the development of online games.

It appears they are supposed to launch a long awaited game called Grandia Online in August of 2009.

The significance to Gravity is that they use the equity method of accounting for their 16% ownership interest. This has resulted in a fairly significant expense on the income statement.

When a game is under development all of the costs get expensed until it is proven feasible after that point the costs get capitalized. With the launch of Grandia, it is possible they may be able to start recognizing a return from their investment in the fund.