Seeking Alpha
View as an RSS Feed

Omer Altay  

View Omer Altay's Comments BY TICKER:
Latest  |  Highest rated
  • Perfect World: Buyout Offer Likely To Be Raised [View article]
    They have a definitive agreement in place at $20.20 with financing ready to go. I'm expecting a higher offer. Agreed, they are being shifty, especially with the math I outlined earlier. Hopefully they report 2014 Q4 and 2015 Q1 before the deal goes through so shareholders get a better deal.
    Apr 26, 2015. 10:35 PM | Likes Like |Link to Comment
  • Perfect World: Buyout Offer Likely To Be Raised [View article]
    Also worth mentioning. This is one of the clearest merger agreements with funding ready to go. Founder has $900M credit facility ready to go. No consortium, no PE partners, credit available ready to go. Simple.
    Apr 26, 2015. 09:47 PM | Likes Like |Link to Comment
  • Perfect World: Buyout Offer Likely To Be Raised [View article]
    vote no to the takeover at 20.20. price will have to come up. changyou will report tonight and may boom tomorrow. they have one game in top 100 pwrd has 4. I suspect a higher price is coming soon. no reason to accept the lowball 20.20. I expect 24-25 to seal the deal in the coming months
    Apr 26, 2015. 08:03 PM | Likes Like |Link to Comment
  • Perfect World: Buyout Offer Likely To Be Raised [View article]
    I own PWRD. I disclosed so as per traditional seeking alpha disclosure policy.

    Offer is in USD as per the source I cited. I don't think it's like the Dell scenario at all. Company is literally a steal, being purchased at book value (which is mostly cash/current assets). Plus it's a Chinese company which can complicate things. No idea when closing happens. No one will know until they announce it.
    Apr 25, 2015. 10:37 PM | Likes Like |Link to Comment
  • Perfect World: Buyout Offer Likely To Be Raised [View article]
    News from China. No idea why PWRD is radio silent in the U.S.
    http://bit.ly/1Dnc7XX

    Important part "Perfect World and Migu game will be a new attitude in the 2015 campaign is full of opportunities, Perfect World COO Zhangyun Fan said that the perfect world of mobile gaming revenue in 2014 has reached 1.1 billion yuan, has occupied a quarter of the company's total revenue income. In 2015 there will be nearly 30 products available" (Google translate)

    Cooperation announced with a company called Migu. More importantly, they said their mobile game revenues for 2014 had reached 1.1 billion RMB, or 25% of their total. 3Q2014 they said mobile was 20% of their quarter's revenue. Now for all of 2014 its 25%? Interesting.

    Some simple math-
    Q1 2014 891,072,839 RMB
    Q2 2014 928,368,627 RMB
    Q3 2014 974,297,223 RMB
    Officially reported total: 2,793,738,689

    Q4 ~1,600,000,000 RMB (IF 1.1B is truly 25% as per the quote above). They guided on the high end of 1,072,000. I cannot imagine they'd guide 50% lower than these estimates. But who knows. Maybe their mobile games were on an absolute tear, deferred revenues were recognized, and then some. PWRD doesn't own 100% of the equity in their mobile game companies, but as far as I understand are the majority owners by far, so that doesn't account for the difference either.

    Thoughts?
    Apr 25, 2015. 02:30 PM | Likes Like |Link to Comment
  • Perfect World: Buyout Offer Likely To Be Raised [View article]
    The increase in deferred revenue was significant last quarter - 120 million RMB. Had that 120 million RMB been reported as revenue it would have been smashed estimates and the stock would have zoomed up.

    Their mobile games are doing well and Dota 2 had a big tourny in Asia which was huge for them (Very profitable).

    Agreed that they have remained undervalued for a long time, but revenues were not growing prior to last year. They're in growth mode now and the company wants to go private before showing wall street the books, which were due over a month ago. Q1 earnings are being released for most companies now, but PWRD hasn't released Q4 2014. AFTER they booked a huge increase in Q3 for deferred revenues. I think they're masking their growth.

    There's upside because the privatization of PWRD relative to Shanda Games/Giant Interactive is mind blowingly cheap and values the operating co at $0. At 5x TTM EPS for the operating co (which just started growing, RAPIDLY might I add) this is a $30 fair value takeover JUST to match the SUPER CHEAP takeovers of Giant/Shanda.
    Apr 24, 2015. 03:25 PM | 1 Like Like |Link to Comment
  • Perfect World: Buyout Offer Likely To Be Raised [View article]
    I'd also like to add: I've emailed investor relations (ir@pwrd.com) close to a dozen times inquiring about Q4 2014 results and never received a response.

    Looks to me that they don't want to show their growth. I think costs were inflated and revenues deferred in Q3 2014 too (which led to the fall in share price that allowed the $20 offer to look decent). Deferred revenues increased $110M RMB last quarter, which if booked as revenue would have been a blowout.

    Another reason this looks like an easy deal to finance is that $130M USD of the company's liabilities are deferred revenues, which in the online game space isn't a "real" liability. A customer bought a virtual item/coupon/etc, but didn't use it in game yet. The revenue was already booked and there's zero cost of delivering that good/service.
    Apr 24, 2015. 12:31 PM | Likes Like |Link to Comment
  • Perfect World: Buyout Offer Likely To Be Raised [View article]
    Too many people think the company can just be bought on the cheap because it's Chinese, but shareholders may have an ally in Fosun and the equity value here is MUCH higher than Shanda/Giant. The risk reward profile here looks great.

    For those curious too - the RE assets haven't appreciated much since my article on its value (has increased though, but only marginally). I said the value was conservative because the company has been depreciating the asset on its balance sheet from its acquisition cost.
    Apr 24, 2015. 11:52 AM | Likes Like |Link to Comment
  • Disney: Not so fast on skinny bundling, Verizon [View news story]
    This is why my generation won't have cable. I haven't had a pay TV package in 6+ years. Why should I? I have Netflix and can find any other TV show I need to watch online quite easily.
    Apr 17, 2015. 11:17 PM | 7 Likes Like |Link to Comment
  • More On Lumber Liquidators And Formaldehyde [View article]
    I'm opening a small long position in LL. Anyone this obsessed / unreasonable over a stock is more likely to be wrong. The 60 minutes bit was damning, but they seem like they're okay on the regulatory front despite what Tilson claims...
    Apr 15, 2015. 05:53 PM | 20 Likes Like |Link to Comment
  • Realty Income: Foreshadowing An Acquisition? [View article]
    Since when did Buffet ever buy into real estate? Is he owns real estate companies like brokerages/commercial brokerages/RE services, but does Buffet own any real estate assets? I don't think that's his MO at all.
    Apr 14, 2015. 04:47 PM | Likes Like |Link to Comment
  • Shanda's Buyout Price Needs To Jump To $10.25 [View article]
    Update: they have a few other mobile titles, but based on searching their names, they don't seem to be doing well. Only Million Arthur is doing well and it's not a new game.
    Apr 13, 2015. 04:15 PM | Likes Like |Link to Comment
  • Shanda's Buyout Price Needs To Jump To $10.25 [View article]
    Hey Charles,

    Interesting read. I've looked at Shanda quite a bit but the company's growth prospects are actually pretty bad. You say they dominate mobile, but that's just not true. They have 1 mobile game - Million Arthur. It's doing well but it's not "dominating" mobile. I think you're focusing on the wrong company. They're cheap no doubt on a PE basis, but earnings shrinking and there's a better play.

    Take a look at PWRD. They have a $20 offer from the founder, but this is ridiculously low too. Unlike GAME though, PWRD has a lot of growth right now. More so than ever It seems. Their mobile games are killing it. Look at AppAnnie's china IOS stats. Dark Dawn, Condor Heroes, Fighting baby, Magic Baby, Saint Seiya. They're all on the top 100 list. Dark Dawn is top 20. PWRD didn't even release Q4 earnings yet (They want to buy the company cheap maybe? So they aren't releasing numbers?). Oh the client game front (very profitable) they only have one of the most popular games in China now - Dota 2. #3 on Baidu's forum listing in terms of popularity ahead of World of Warcraft. #11 or so in baidu's top search terms. Revenue is growing at Perfect World, unlike Shanda.

    Oh and PWRD's balance sheet is much much better, making a higher price more easily digestable by the founder. Just the real estate value (carried about book but appreciated A LOT) + current assets are close to $20 per share. Game is cheap but PWRD is the better play here IMO. If they just released their darn Q4 numbers and an honest outlook, price would be well over $20 today.

    Thoughts?
    Apr 13, 2015. 03:43 PM | Likes Like |Link to Comment
  • American Realty Capital Properties - Clean Books, Great Assets, Superb Value [View article]
    Update on Cole Capital fundraising for those interested:

    September 2014
    CCPT V - $43.6M
    CCIT II - $39.0M
    Cole Real Estate Income (Daily NAV) - $

    October 2014
    CCPT V - $52.4
    CCIT II - $44.9M
    Cole Real Estate Income (Daily NAV) - $7.7M

    November 2014
    CCPT V - $7.3M
    CCIT II - $11.6M
    Cole Real Estate Income (Daily NAV) - $2.1M

    December 2014
    CCPT V - $2.5M
    CCIT II - $2.6M
    Cole Real Estate Income (Daily NAV) - $849K

    January 2015
    CCPT V - $2.7M
    CCIT II - $2.9M
    Cole Real Estate Income (Daily NAV) - $418K

    February 2015
    CCPT V - $1.5M
    CCIT II - $7.9M
    Cole Real Estate Income (Daily NAV) - $256K

    March 2015
    CCPT V - $5.5M
    CCIT II - $8.9M
    Cole Real Estate Income (Daily NAV) - $3.8M

    Data pulled from Cole's SEC filings. Sales picking up, but still far from what they used to be. April's numbers should be much better and May should see an even bigger increase. If we don't see decent increases by May, then we know Cole is seriously impaired.
    Apr 10, 2015. 05:00 PM | 1 Like Like |Link to Comment
  • The End Finally Nears For Shanda Games [View article]
    $PWRD is a steal at today's price. PWRD is much better value than Shanda Games. Shanda earnings and revenues were on the way down. PWRD is trending up with strong mobile game releases and client games (Dota 2). Since the $20 offer was made for $PWRD a lot has changed.

    1) Fundamentals have improved. Look at the Chinese web portals listing mobile games by popularity. PWRD has a few names in the top 100 list. AppAnnie is a decent look into the iOS top charts. Dota 2 is gaining traction in China.

    2) Chinese stocks are going bananas. Shanghai stocks have been booming and Hong Kong is joining the party as of the last week.

    Curious why PWRD has remained silent about Q4 earnings. Maybe they don't want to show good numbers? Who knows. I think PWRD is going to privatize for more than the original offer. Shareholders won't get a "fair" price, but I'll be happy with $24. If PWRD relists in HongKong or Shanghai, the company will easily be worth $40+ a share (conservative) based on other gaming company multiples.
    Apr 8, 2015. 11:16 PM | Likes Like |Link to Comment
COMMENTS STATS
503 Comments
951 Likes