The cash position is a huge safety valve. It gives me time to figure out how much I like it. The turnaround story over the last few quarters was enticing enough. The potential for the long awaited sequel Ragnarok II makes it that much more interesting. I liked how the presentation laid out the relative valuation (pg. 21). It shows the possibilities compared to their competitors who trade at 5-7 times book value, when GRVY is only trading at book value. If the company regains some of their old luster with Ragnarok II, or bring new users in with Ice Age Online or some of their newly released games like Requiem or Emil Chronicle takeoff than we have a catalyst to bring us to their competitors book value. I think consistent profitability gets us to at least 2-3 times book. One of the expense items I see difficult for them to keep this low is R&D. It is their lifeblood, as they reinvest into their existing platform, or development into new games. It seems a bit low in the most recent quarter and I would expect this to not consistently be the case. The management has done enough to make this a very interesting story, hopefully it will have a fairy tale ending.
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