Hallo,
Tussen alle trash op het Yahoo! board zit af en toch een pareltje van een post...
Mvg,
Gert.
Just caught up to all the posts, SO MANY GREAT ONES, from all the 'Usual Suspects', lol. So I thought I'd chime in with some thoughts of my own.
Wang basically said '@#$% You' to the short-term this Q. If anyone ever doubted his spiel 'We intend to build the dominant Asian gaming/gambling company for the long-term', they should no longer. As c and random pointed out, they could have blown away estimates and reaped great short-term stock performance and accolades, not to mention rewards, if they wanted to do so. Instead they invested in marketing to make Hellgate an even bigger winner next year. Tough now, GREAT later. They've done this before, this is nothing new. They invested in EP and managed the @#$% out of it. This is how they got me from $1.50 to $15.00.
If you wanted to throw away EVERYTHING else, except EARNINGS, you could, because in the end, earnings are all that matter. So forget all the angst about today's call, management's style, etc. Bottom line is that GIGM will earn approx. .65 this year. 25x.65=$15.60, 30x.65=$19.50, or pick your # in-between. I have heard some here say that because of this, GIGM will be around $20 YE. But all should remember that the market entire trades 6 to 9 months IN ADVANCE, because that is what individual stocks do. This is not my opinion. This is historical fact. So(and this is VERY IMPORTANT) if you believe that M4$, Pachinko, Pachislo, Japanese poker, Hellgate, the SEGA game, ISP sale etc., will actually launch this summer, THEN you MUST believe that GIGM will be reflecting mid-'08's EPS and THEREFORE will be selling HIGHER YE than a reasonable multiple x '07's EPS. Or therefore, higher than $20. This is what I believe.
It's a long way till the August call, even longer to the one in November, the one I once thought would blow the roof off GIGM, by causing rapid PE expansion based on the 2nd full Q of M4$ results. Obviously this is no longer the case. But the next 6 months are now CRUCIAL to the next phase of earnings growth, not to mention management's continued credibility. Unfortuneately, it's always 'what have you done for me lately?' Those initiatives that Arthur said today will launch in Summer, MUST in fact LAUNCH in Summer. Even better by the August CC. If they DO that, and hopefully sell the ISP too, then all is well,
even better than well for '08 and beyond. And this will be reflected in the YE share-price. It all depends on how much higher these initiatives drive GIGM's '07 EPS of .65 to. If they all launch in Summer '07, can they make that .65 look like $1.05 in '08? If so, expect $24 to $30 in December '07.
I once thought EP would die off, and be replaced by M4$. But I underestimated management's vision(Texas Hold'em in the EU?!?!) and their ability. EP is going to be a long-term winner. Now this same management team will be launching M4$........AND......Pachinko, a game the Japanese are as fanatcial over as the Chinese are Mahjong. Basically 2 MORE EP's!! Does that sound like a reason to SELL?!?
One more thing: 4M shares today and they could barely get it under $15. Whoop-de-doo.