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Real Life Investors vs MMORPGs financial expert pannel.
Assasinated
Member Posts: 31
I post this because the AoC forum talks very little gametalk and a lot about financials. Everything is about FC's 40 Mill $ in the bank, quarterly revenue and many other non MMO related stuff. A lot of these posts are about doom and gloom. I don't know Jack about financials, but I find one thing odd. Why is it that FC's stocks have increased like +20% since start of week till now? Real life investors seem to think FC and AoC have good things going for it. This is however not what the mmorpg expert pannel tell us.
I started like a couple of days back in AoC and all I can say is Wow. This game rocks. I have not done a lot yet, so I don't want say too much, but the game runs super smooth so fare. Have not seen much bugs either except that I was trying to open a door that I think I should be able to open. Could not open it, and it's kind of confusing. I might have been doing something wrong... I'll give an update later. But bottom line is the game seem very good, players are happy, even the investors are happy, why are everybody so negative in mmorpg?
Comments
The stock is going up since some of the uncertanties around AoC has been removed. The game will not fade away and die. This has been confirmed by the financial figures and by management.. Since the game and company will live on for some time then the stock has rizen a little. Note that Funcom stock took a serious beating falling from 55 NOk to 2.35 NOK.
The poster above is wrong regarinding other sources of income beeing bigger than AoC for funcom. The only other significant source of income is Anarchy Online. Which is peanuts compared to AoC.
For the stock to rize any further there has to be a major returjn of players
Originally posted by BishopB:
Are a lot of the trolls just angry kids with old gaming hardware?
I agree, it is very simple, you like the game or not, but how come the investors like the stock, and these guys recommend it (google translate works pretty good) if it is not any good.
http://www.hegnar.no/analyser/article361423.ece (25/2-09)
http://www.hegnar.no/analyser/article361419.ece (25/2-09)
http://www.hegnar.no/analyser/article361385.ece(25/2-09)http://www.hegnar.no/analyser/article361220.ece (24/2-09)
It's beyond me. Peace out.
The smart investor dosent worry about the past. Launch, previous bugs, 90% quitting etc is history. Who really cares. The smart investor tries to evaluate the future potential of the income flow compared to current pricing of the stock. As of today the stock is beaten to an unrecognizable pulp. However people are now starting to beleive that the game will survive and even possibly attrackt new players sell more time cards and grow. Who knows, it might even grow to a similar size of LOTRO, WAR and EVE (200-300K) .
The positive investor, who belives this, will buy the stock and reccomend it.
The negative investor beleives that it will not grow, playerbase will shrink, costs will grow, the game cannont possibly attract more players.
The stock is rizing right now because there are more positive than negative investors.
Originally posted by BishopB:
Are a lot of the trolls just angry kids with old gaming hardware?
The reason the stock price has gone up a bit since the begining of the year has nothing to do with Funcom. All it has to do with now is the value of the currency.
As far as Funcom goes, they are in big big trouble. Their main source of income IS AoC. They lost 23,000,000 u.s. in the 4th quarter alone. The reason why they lost around 7,000,000 u.s. in the 3rd quarter was because of profit from the box sales and a mysterious 6,000,000 that appeared because of some "error".
Now Funcom has 40,000,000 u.s. in cash atm but how long will it last when you they are losing close to 8 million a month. Plus I do believe they have a long term debt of 22,000,000.
Funcom is going to have to do 1 of 2 things to stay in business.
#1 Focus on AoC, sell the other projects they have going on and lay off most of their staff.
#2 Sell AoC and focus on their new projecs and hope they can make a mmo that can produce more profits than AoC does.
Funcom cant do both unless someone invests alot of money into this company which is very doubtfull. AoC doesnt bring in enough money for them to keep AoC going AND to keep the employees working on the projects.
The reason the stock price has gone up a bit since the begining of the year has nothing to do with Funcom. All it has to do with now is the value of the currency.
If the NOK gets stronger it would be more expensive for people in US or EU to buy the stock, it wouldn't increase the cost of the stock in Norway would it? How can you then explain that the stock has increased in price in Norway too? Specially since other stocks at the same time has decreased in value...
Playing: Battlefield - Bad company (Xbox360) Arma2, DFO (PC)
On my radar: TSW, MO
MMO's played: SWG (pre cu/cu), WoW, AoC, WAR, DFO, Planetside
MMO's that I have tested: Lotro, L2, Aion, Ryzom
#1) Remember investors are wrong just as often as they are right actually most are wrong compared to darts or the aggregate market ;p
It defies all logic, American Institutional Investors/ Money managers can't even buy this stock because it's price tag is almost $4.50 to low @ .64 cents USD so there should not be hype surrounding FC anymore....Institutions and money managers are responsible for the trade volume and the price fluctuations in the USA markets.
The only thing I saw was the CEO buying shares, but that is probably an effort to save his own job.
There has been no good news forecasted about this stock only more doom and gloom per Funcom:
Lower revenue projected next quarter, no certainty of gaining new subs or bringing people back, they demonstrated an inability to achieve a positive RoI with the IPO money when they wrote AoC off. I found it funny though the EPS was -.58 which is almost as much as each share now.
***************************
A few months ago it would have been profitable to buy a majority stake and liquidate the company but now the market price per share is probably just based in cash assets and indiference.
Total Funcom Shares, rounded: 32,700,000 x .64 cents USD = 21 million USD
Total Assets: 73 million USD
Of which, 39 million are cash and equivalents.
***********************
I guess it still works, if someone bought a majority stake and liquidated they would come out ahead...that is the only way I see this stock being worth anything, because it is doubtfull they will ever pay dividends.
Funcom has reviewed all of its assets relevant for
impairment testing. This process has led to
recognition of an impairment loss of around
3,1 MUSD for Age of Conan due to a decrease in
numbers of subscribers for the game. Funcom Q4 10 report.
http://forums.ageofconan.com/showpost.php?p=2926123&postcount=7 500 mains/alts on Tyranny in past 30 days - instead of merge servers let's open a new PvP server, again! http://forums-eu.ageofconan.com/showthread.php?t=106427
Here we go, another 'new' poster coming here talking about AOC going up 20%.
The reason the stock has 'gone up' is because it was beaten down to like 40 cents (USD)... a 20% increase is 8 cents. Look at the average daily volume.. it is down to 150,000 shares per day.. which means in an entire 8 hour trading day, about $60,000 in stock is traded. That is NOTHING. All it takes is one buy order and the stock pops up... and then the next sell order and it drops back down. The stock is so light right now, that it takes very little money to move the stock price. In contrast, when a company has a decent stock price, and has a lot of shares trading hands $60,000 wouldn't even be a noticable trade on the ticker.
Just to give you a contrast.
Activision Blizzard has about $150,000,000 in stock trades every day.
Funcom has about $60,000
It really looks like the new CEO is making a play on buying Funcom and taking it private.. the problem he will have is that there are very few shares being traded, so whenever he makes a trade, it causes the stock to pop.
You should really read some of the books by Benjamin Graham ( the Intelligent Investor). One of the things he talks about is situations where cash > market value. The main point is that either the cash isn't really there, or else management is expected to blow through that cash before the 'public' could buy the company and liquidate it.
The other part is just math. You are assuming you could buy the company at 4 NOK per share. The fact is that as soon as you started buying a lot of shares, the buy pressure on the stock would move it's price up quickly before you could even buy a decent part of the company.
Investors are not happy. The stock is down over 90% year over year. Even GM stock had a 20% bounce yesterday...it really demonstrates nothing. And like a previous poster said, the stock is trading so lightly that these moves are insignificant. People investing in Funcom on the risk/reward ratio of a possible payoff are also risking their entire investment. That or they are employees or board members of Funcom who have a personal stake in the success of the company.
One could really call it a "deadcat bounce". That is, even if you throw a cat off a roof, it will bounce up for a second when it slams into the ground.
So let me see if I get this straight, Finaticd, Hamrtime2, and Litigator_AB you think that your opinions are more correct than the opinions of the investors and the analytics on FC and AoC. You think your posts hold higher quality than the calculations the investors that actually have bought FC stock since beginning of this week.... I find that a bit hard to belive and I also am confused by Litigators "Investors are not happy"?? The bloody stock have gone up like a madman this year.
Again, I have little clue about finances but I think somebody is wrong when 4 different Investor Banks, analysts and whatever (found this is a different post somewhere) come out with the same massage the same day after Q4 reports. Let me just copy paste what these guys just said TODAY (not 2 months ago):
#1 Analyst: This stock can double in www.hegnar.no/analyser/article361220.ece (24/2-09)
Orion Securities talking about sale, acquisition candidate, growth machine and doblingscandidate. Here is today's share tips.
In today's morning report from Orion Securities referred to the following shares to the current case:
Funcom (4.10) - "fallen angel" on sale. The most interesting aspect of Funcom's stock is now traded at a discount relative to cash holdings. This was at about 260 million by the end of last year, while the stock market value is at 216 million. Then Funcom is an acquisition candidate as a result of its leading technological position in the world.
#2 www.hegnar.no/analyser/article361423.ece (25/2-09)
Geir Linløkken Invest in Tech waiting rise in the share price and recommend purchase of these shares.
In the latest issue of ØR goes Research Geir Linløkken in Investtech.com out of four purchase recommendations.
Linløkken new portfolio:
• Northland Resources
• Funcom
• Synnøve Finden
• Copeinca
#3 www.hegnar.no/analyser/article361419.ece (35/2-09)
Broker Arne Wessel-Berg in RS Platou Markets gives you his investment tips in his recommended portfolio in the Financial Report Stock Market Mirrors.
Acergy
Funcom
Cermaq
Opera Software
OBX derivative Bull
#4 www.hegnar.no/analyser/article361385.ece (25/2-09)
Three listed companies described as super shares. The figure you get here.
In the last edition of ØR get only three to gain a share in what is called "Economic Report super portfolio". Super portfolio consists of stocks that are most frequently recommended, or the highest weighted, the experts in ØRs share competition.
Buy recommendations:
• Opera Software
• Funcom
• Tandberg
It is not given any kursmål.
At least some people belive in AoC...And me of course
I am level 16 now.
Oh I know! A hostile takover would shoot up the stock beyond a break even point. The board of directors hinted at it so I was assuming they already had a major stake, percentage wise, in the company. However, it demonstrates your point well.
Also, his formula is the basis for current academic stock Valuation, en.wikipedia.org/wiki/Stock_valuation
As he was keen on dividends, and long- term growth (which would mean the company is efficiently using assets to generate a return and expand).
EDIT----Buffet's BH does not pay dividends and the price goes up do to growth but I thought it was funny whenever academics write about the power of dividends they always analogize not paying them to a black hole company where investors money goes in and never comes out.
***********************************
@ Assassinated
when Funcom comes out and says it expects no growth, has never paid a dividend and are burning through it's cash cache, and have just made a substantial negative RoI on an aplication based on the only technology they possess, the game engine.
I just have to assume the people reccomending the stock didn't attend American or Canadian Business Schools because they are looking at the cash the company has compared to the price rather then how effectivly FC uses those assets. Whole =/= Sum of the parts!
Though I did read one book that would explain this situation well..A Random Walk Down Wall Street which says pretty much it's the market stupid and illogical consumer behavior dictates everything...which goes in accord with me saying throwing darts and index funds usually > financial experts.
Funcom has reviewed all of its assets relevant for
impairment testing. This process has led to
recognition of an impairment loss of around
3,1 MUSD for Age of Conan due to a decrease in
numbers of subscribers for the game. Funcom Q4 10 report.
http://forums.ageofconan.com/showpost.php?p=2926123&postcount=7 500 mains/alts on Tyranny in past 30 days - instead of merge servers let's open a new PvP server, again! http://forums-eu.ageofconan.com/showthread.php?t=106427
You want game talk? Ok, the game is lame. After 800k sales of the client the VAST majority took a hike because they didn't like the game. Not because it was buggy, thats to be expected. But because the game was incomplete, lacking content and for many an unsatisfying game experience. Right now the number of subs is at its lowest point. LoTRO has a free trial, offered at around 4 to 6 months, and now WAR, several months younger than AoC has a free trial. Regardless of what the financials may or may not say, AoC as compared to the hype and hopes of FC is failing.
As far as being a new player and liking it, come back when you've hit 80. When you've run your 5th trip through Tortage, when you've run through the 3 starting areas at least twice. When you've experienced all FC has to offer in AoC then we can talk about your impressions.
I am just asking. How come all these financial dudes above recomend FC and AoC now while you dooming? Are they wrong?
Hey level 18 now
two reasons I see for dooming
1) They have been burned and "hate" funcom. They have lost money and are bitter or they are simply defending their negaivet predictions (pride)
2) They have an monetary interrest in the stock reducing in value. (short selling) - thought i find this unlikely as it is highly risky at current low levels.
When it comes to Funcom stock all that matters is no of players. The best way of predicting the stock is through xfire. Its not perfect but it is highly correlated. All the economically techincal stuff, eventhough usually important, is not as important as the hype around AoC. More hype, more value. More hate, less value. Its actually that simple.
Originally posted by BishopB:
Are a lot of the trolls just angry kids with old gaming hardware?
Funcom has lost money every quarter for more than three years. The company continues to lose more money every quarter. That's what I reported. The bias comes about when people try to spin those losses into something positive.
3Q08 was profitable by 2.4M. Of course they lost like 23M in 4Q08 which completely dwarfed their one positive quarter. But they did, indeed, have a profitable quarter once since going public many years ago.
After suffering 14 consecutive quarters of negative profits during Age of Conan's development, we were under the impression that Funcom's future would be largely dictated by the success of this particular title. Funcom says as much in the Risk Factors report included with the Q4 2007 financials:
Link: www.funcom.com/wsp/funcom/frontend.cgi
"Funcom's future income is highly dependent on the success of the Age of Conan MMO ... [the game] is expected to contribute with significant revenues and earnings..."
"Furthermore, the game is intended to be one of the funding sources for the development of other titles ... lower cash inflows than expected could also have an indirect effect in terms of reduced revenues, earnings, and cash flows from other games and the future funding requirements of the Company."
Indeed, Funcom has dug itself into quite a hole over the past few years while banking on Age of Conan's future success. If we take a look at the cumulative losses in operating profit piled up since the beginning of 2005, we see that the damage has now topped.
I am absolute in my opinion that Funcom is a garbage company and that my analysis of Funcom's position is better than these obscure Norwegian security firms.
I also think my calculations are far more informative. Because quite frankly, I don't care if Funcom's balance sheet from 2008 looks okay. Because the product that is their only source of substantial revenue is garbage, they have too many employees, and the MMO market is not forgiving to failed launches.
And sorry kid, the stock is down 92% for the year. For every person who bought in at 3 NOK and has made a 30% profit the last month there are, quite literally, 1000 investors who have lost 90% of their investment. Down 95% or 92%...it is still a disaster.
Note that on yahoofinance Funcom had buy recommendations all throughout May-July from prominent security firms in Norway. Now how good was that advice?
Lol,
Lit
3Q08 was profitable by 2.4M. Of course they lost like 23M in 4Q08 which completely dwarfed their one positive quarter. But they did, indeed, have a profitable quarter once since going public many years ago.
They were hiding losses in cash flows that quarter, which they differed to this quarter.
Funcom has reviewed all of its assets relevant for
impairment testing. This process has led to
recognition of an impairment loss of around
3,1 MUSD for Age of Conan due to a decrease in
numbers of subscribers for the game. Funcom Q4 10 report.
http://forums.ageofconan.com/showpost.php?p=2926123&postcount=7 500 mains/alts on Tyranny in past 30 days - instead of merge servers let's open a new PvP server, again! http://forums-eu.ageofconan.com/showthread.php?t=106427
Think very carefully about this statement.
If financial analysts really had the first clue about what they are talking about do you really think they'd need to waste their time sharing the info? They'd just go out and make themselves rich off of their predictions.
The fact that its more profitable for them to sell their advice than to actually put it into practice speaks volumes as to their accuracy.
And yes, some of the people on these forums have performed better than the analysts, especially those who predicted Funcom's total stock crash. (which for the most part happened prior to the problems caused by the market at the end of 2008)
"True friends stab you in the front." | Oscar Wilde
"I need to finish" - Christian Wolff: The Accountant
Just trying to live long enough to play a new, released MMORPG, playing New Worlds atm
Fools find no pleasure in understanding but delight in airing their own opinions. Pvbs 18:2, NIV
Don't just play games, inhabit virtual worlds™
"This is the most intelligent, well qualified and articulate response to a post I have ever seen on these forums. It's a shame most people here won't have the attention span to read past the second line." - Anon
I am absolute in my opinion that Funcom is a garbage company and that my analysis of Funcom's position is better than these obscure Norwegian security firms.
I also think my calculations are far more informative. Because quite frankly, I don't care if Funcom's balance sheet from 2008 looks okay. Because the product that is their only source of substantial revenue is garbage, they have too many employees, and the MMO market is not forgiving to failed launches.
And sorry kid, the stock is down 92% for the year. For every person who bought in at 3 NOK and has made a 30% profit the last month there are, quite literally, 1000 investors who have lost 90% of their investment. Down 95% or 92%...it is still a disaster.
Note that on yahoofinance Funcom had buy recommendations all throughout May-July from prominent security firms in Norway. Now how good was that advice?
Lol,
Lit
Look guys, don't confuse me not knowing financials for being stupid. There's like 4 different proffesional Analysts/Banks above recommending FC and AoC (all of them yesterday) and you say not one but all of them got it wrong and are useless... While this Analyst www.mmorpg.com/discussion2.cfm/thread/224635/Fredrik-Thoresen-DnBNor-Markets-Age-of-Conan-has-around-70000-players.html, dropping a few anecdotes on FC 2 months back, got a full very active thread going alone on a nearly outdated topic. Right now I suspect it's just because he happened to have some opinions (2 month old that is) that coincides with yours. I am sure it looks that way for many other people too so perhaps you want to explain us better.
My point here is, if you guys mean the analysts above are wrong, where did they miscalculate something? I mean what is it that they think is good that you disagree with? Please focus on this question instead of just writing some negative stuff to solidify your opinion. I am interested in finding out what is it in the professional analysts analysis that you disagree with? Once we have established this it should be easy for us readers to vote on the Real Life Investors or our own MMORPG analysts.
A more accurate statement would be that FC is down >90% from it's 52 week high. If you did take these "so-called" financial professional's advice during May and bought FC's stock when the stock was at it's premium then you got totally screwed.
This stock might be a good deal if the current global economy wasnt soo f*ck'd up, where a person wouldnt mind taking a few risks. However, at this time, taking financial risks is foolhardy.
I am absolute in my opinion that Funcom is a garbage company and that my analysis of Funcom's position is better than these obscure Norwegian security firms.
I also think my calculations are far more informative. Because quite frankly, I don't care if Funcom's balance sheet from 2008 looks okay. Because the product that is their only source of substantial revenue is garbage, they have too many employees, and the MMO market is not forgiving to failed launches.
And sorry kid, the stock is down 92% for the year. For every person who bought in at 3 NOK and has made a 30% profit the last month there are, quite literally, 1000 investors who have lost 90% of their investment. Down 95% or 92%...it is still a disaster.
Note that on yahoofinance Funcom had buy recommendations all throughout May-July from prominent security firms in Norway. Now how good was that advice?
Lol,
Lit
Look guys, don't confuse me not knowing financials for being stupid. There's like 4 different proffesional Analysts/Banks above recommending FC and AoC (all of them yesterday) and you say not one but all of them got it wrong and are useless... While this Analyst www.mmorpg.com/discussion2.cfm/thread/224635/Fredrik-Thoresen-DnBNor-Markets-Age-of-Conan-has-around-70000-players.html, dropping a few anecdotes on FC 2 months back, got a full very active thread going alone on a nearly outdated topic. Right now I suspect it's just because he happened to have some opinions (2 month old that is) that coincides with yours. I am sure it looks that way for many other people too so perhaps you want to explain us better.
My point here is, if you guys mean the analysts above are wrong, where did they miscalculate something? I mean what is it that they think is good that you disagree with? Please focus on this question instead of just writing some negative stuff to solidify your opinion. I am interested in finding out what is it in the professional analysts analysis that you disagree with? Once we have established this it should be easy for us readers to vote on the Real Life Investors or our own MMORPG analysts.
Do you know who struck it rich in the California Gold Rush? The Merchants who sold the picks and shovels, not the Miners. Analysts and Trading Firms are 'selling picks and shovels' in the stock market. There were a ton of analysts that tried to steer me away from Micro-Soft when they went public, glad I didn't listen.
As for Litigator_AB, he has been on top of this early on, and has been on the mark, and as for your question about those Norweigian analysts, he answered you and now you are trying to ignore it because you didn't like his answer.
Norweigian analysts will always be wrong since they are seeing funcom from within a certain degree of national pride. A degree of bias is involved.
You can't have read his post. I think he is asking why some people only refer to an outdated negative article from back in Dec, but not to the four positive articles that came out yesterday or whatever. They are all norwegian so... He kind of have a point. I think certain people are using financial rubbish to get to FC now.
I just came from WAR a couple of weeks back and I'll tell you, AoC is in a remarkable good state compared to Mythics shit. Bleeeehhh... WAR is boring and screwed up!!!