Is There An Easy Solution To Nokia's Problems? [View article]
Hey Abu. I completely agree, and perhaps I didn't make my self clear. I actually think Nokia + Microsoft has done a pretty good job with its advertising, however the data shows that there likely won't be any further benefits from extra advertising. Nokia as you say need to create word-of-mouth communications (because that creates desire at a higher degree than a commercial).
Can Nokia Succeed With Its Strategy? [View article]
All good points. I didn't include restructuring costs in OPEX though, and to be fair (to my self), the focus of this article was on smartphones (and not its other divsions). Anyway, I would like to hear your thoughts on why you believe my sales estimates. Remember though that I am not trying to predict sales on quarterly basis. Rather my focus is on sales on an annual basis (roughly 26M). Why do you think that is conservative? Which factors make you believe that Lumia sales will increase signifcantly over the next year?
Activision Blizzard: Why Earnings Will Decline [View article]
Happyshorter; I haven't studied the Q4 yet, but I think the topline beat is explained by better Skylander's/CoD growth than ATVI outlined. However, be aware that the Q4 estimates I used in the model matched those from ATVI's management.
Also note that the key to my arguments were never COD or Skylander's doing bad short-term.
On the other hand the loss of WOW-subscribers is much more important to the valuation, and please note that subscribers declined from 10.1M to 9.6M this quarter.
Aswath Damodaran isn't crazy about David Einhorn's Apple (AAPL) preferred stock proposal. "Issuing preferred stock will not add value to the company," the finance prof. argues. Moreover, while such a move could lift shares by removing investor fears of never seeing much of the cash Apple generates, regular dividends and/or buybacks could do the same. Nonetheless, Damodaran is glad Einhorn is "rocking the boat," as it "opens the door to a healthy discussion about how Apple should deal with its large and growing cash balance." (previous) [View news story]
I don't think Ashwath really understood Einhorn's argument.
Activision Blizzard: Why Earnings Will Decline [View article]
Hey Ryan: You bring up some good point. I think we can put some numbers on the various market leaders; 1) Sold copies of a game; Call of Duty with roughly 30M. 2) F2P active players 12-30M (I guess it depends on how you define active players. 3) Paid subscriper games; WOW 10-12M (at it's peak, and it averaged 10M over a couple of years).
My theory is that even if Activision (in the hypothetical world) cancelled the CoD franchise and developed a new fantastic FPS game, it would be incredibly hard to get close to CoD's sales figures due to the mean-reversion theory. The same thing applies for World of Warcraft and Titan.
I do, however, agree that the total market size (defined as the amount of people paying/playing games) is expected to increase over time, which will benefit Blizzard as it partially offset the mean-reversion effect.
Regarding the macro-effect, we need to look at all global trends. Like how many players play PC games compared to console, compared to mobile, and then analyze ATVI's strategy on each console. It may not benefit ATVI if more people have broadband/internet access but uses it on mobile games rather than PC/console games. Also if the increase in market size is more than offsetted by increased competion then it won't benefit ATVI as well. I think there are a lot of factors to analyze, and I chose not to look at those in this article as it would be too "time/space-demanding".
Activision Blizzard: Why Earnings Will Decline [View article]
Hey Mr_Stockt;
While I believe Blizzard is poorly managed, I don't think Activision is. In fact, I believe Blizzard could learn a lot from Activision with regards to designing proper business model's to maximize shareholder value.
It's a myth that Diablo 3 was a failure/Sc2 "semifailure" because of the Activision merger. The games were failure due to incompetent employees designing the games. The developers have had all the time in the world to develop these games and there is very little similarity between how D3 and Sc2 works compared to how CoD/skylander's etc. works, which makes me convinced that any Activision impact has been minimal.
Activision Blizzard: Why Earnings Will Decline [View article]
I see your point now with regards to advertising. That is definitely correct. But as you also say the effect of the advertising is limited as the target group from tournmanets is mostly players which already play the game.
I think you misunderstand ny intention behind the assumption. I also think that apple will release a tv, however it would be top complicated to include that into my valuation model. Indstead graders can add their estimated value of the on top of my fair price estimate.
It is bringing interest earnings. And it can still be paid out as dividende or buybacks at some point in the future. I do agree with you that the cash should be valued at a discount which will reduce my fair value estimate
Why Apple's Margins Will Continue To Decline [View article]
Hey croatkid: they are based on my expectations of lower margins. Hopefully my next article will make it a bit easier to see how i got to that conclusion
Why Apple's Margins Will Continue To Decline [View article]
Krichard: every valuation is based om assumptions about the future. I do understand that you probably would like a fair value estimate og apple, and i do in fact plan to follow this article up with a dcf valuation
Is There An Easy Solution To Nokia's Problems? [View article]
Is There An Easy Solution To Nokia's Problems? [View article]
I completely agree, and perhaps I didn't make my self clear. I actually think Nokia + Microsoft has done a pretty good job with its advertising, however the data shows that there likely won't be any further benefits from extra advertising. Nokia as you say need to create word-of-mouth communications (because that creates desire at a higher degree than a commercial).
Can Nokia Succeed With Its Strategy? [View article]
Anyway, I would like to hear your thoughts on why you believe my sales estimates. Remember though that I am not trying to predict sales on quarterly basis. Rather my focus is on sales on an annual basis (roughly 26M). Why do you think that is conservative?
Which factors make you believe that Lumia sales will increase signifcantly over the next year?
Activision Blizzard: Why Earnings Will Decline [View article]
Activision Blizzard: Why Earnings Will Decline [View article]
Also note that the key to my arguments were never COD or Skylander's doing bad short-term.
On the other hand the loss of WOW-subscribers is much more important to the valuation, and please note that subscribers declined from 10.1M to 9.6M this quarter.
Aswath Damodaran isn't crazy about David Einhorn's Apple (AAPL) preferred stock proposal. "Issuing preferred stock will not add value to the company," the finance prof. argues. Moreover, while such a move could lift shares by removing investor fears of never seeing much of the cash Apple generates, regular dividends and/or buybacks could do the same. Nonetheless, Damodaran is glad Einhorn is "rocking the boat," as it "opens the door to a healthy discussion about how Apple should deal with its large and growing cash balance." (previous) [View news story]
Activision Blizzard: Why Earnings Will Decline [View article]
1) Sold copies of a game; Call of Duty with roughly 30M.
2) F2P active players 12-30M (I guess it depends on how you define active players.
3) Paid subscriper games; WOW 10-12M (at it's peak, and it averaged 10M over a couple of years).
My theory is that even if Activision (in the hypothetical world) cancelled the CoD franchise and developed a new fantastic FPS game, it would be incredibly hard to get close to CoD's sales figures due to the mean-reversion theory. The same thing applies for World of Warcraft and Titan.
I do, however, agree that the total market size (defined as the amount of people paying/playing games) is expected to increase over time, which will benefit Blizzard as it partially offset the mean-reversion effect.
Regarding the macro-effect, we need to look at all global trends. Like how many players play PC games compared to console, compared to mobile, and then analyze ATVI's strategy on each console. It may not benefit ATVI if more people have broadband/internet access but uses it on mobile games rather than PC/console games.
Also if the increase in market size is more than offsetted by increased competion then it won't benefit ATVI as well. I think there are a lot of factors to analyze, and I chose not to look at those in this article as it would be too "time/space-demanding".
Activision Blizzard: Why Earnings Will Decline [View article]
Activision Blizzard: Why Earnings Will Decline [View article]
While I believe Blizzard is poorly managed, I don't think Activision is. In fact, I believe Blizzard could learn a lot from Activision with regards to designing proper business model's to maximize shareholder value.
It's a myth that Diablo 3 was a failure/Sc2 "semifailure" because of the Activision merger. The games were failure due to incompetent employees designing the games. The developers have had all the time in the world to develop these games and there is very little similarity between how D3 and Sc2 works compared to how CoD/skylander's etc. works, which makes me convinced that any Activision impact has been minimal.
Activision Blizzard: Why Earnings Will Decline [View article]
How Much Is Apple Worth? [View article]
How Much Is Apple Worth? [View article]
Why Apple's Margins Will Continue To Decline [View article]
Why Apple's Margins Will Continue To Decline [View article]
Why Apple's Margins Will Continue To Decline [View article]