Though SA author John Deamer was once quite bearish on Majesco (COOL) amid plunging sales and solvency concerns, he now thinks the company's real-money gambling efforts spell a favorable risk/reward.
Deamer notes CEO Jesse Sutton emphasized Majesco's real-money partnerships during earnings CCs, and expects revenue to grow as gambling giant Intralot (IRLTF) expands into more states. Majesco's GMS Pariplay JV was chosen by Intralot to provide gambling titles in several states.
He adds Pariplay also has partnerships with Atari (previous), the Isle of Man's Trada Casino, and online casino WinTingo, and that Majesco's Midnight City indie publishing label has multiple games on tap.
At the same time, Deamer cautions Majesco (current market cap of $16M) "has no meaningful games being released until October" via Midnight City, and that liquidity and Nasdaq de-listing concerns remain.
Atari is partnering with Majesco (COOL +10.5%) JV company Pariplay to bring its video games "across real money gambling formats, including iLottery, social, online and mobile platforms."
As part of the deal, Atari's real-money gambling site will feature classic Atari games such as Pong, Asteroids, and Centipede starting in Q4, and Pariplay will distribute Atari titles throughout its network.
Majesco, beset by solvency concerns, closed yesterday near its 52-week low of $0.37.
More on Majesco: Sales weakness is once more blamed on soft demand for Wii titles, including the Zumba Fitness franchise. FY13 (ends in October) revenue is expected to be "significantly below" FY12 levels; no guidance is given beyond that. The Street is already expecting a 41% drop. Opex fell 41% Y/Y thanks to restructuring moves. COOL-20.8% AH to $0.57. The company's market cap now stands at just $23M, below its quarter-ending cash balance of $26.7M. Are we looking at another THQ? (PR)
More on Majesco: The game developer isn't providing specific guidance; instead, it's simply guiding for a 50%+ Y/Y drop in holiday sales, and for FY13 (ends July) revenue to be "significantly lower" than FY12's. Majesco blames poor sales of core legacy console titles for its performance, and says it's closing an MA game studio and cutting personnel at its NJ HQ in order to trim costs. It expects to achieve $1.5M-$2M in annual savings. COOL-23.6% AH. CC underway (webcast). (PR)
More on Majesco Entertainment's FQ3: The poor results are blamed on seasonality and "challenging retail conditions for interactive entertainment." (ed: NPD seems to agree about the latter). Wii game sales (61% of total) fell 60% Y/Y to $5.5M. Majesco now expects FQ4 results to be "in the lower end" of a revenue guidance range of $130M-$140M and EPS range of $0.20-$0.30. Street estimates stand at $139M and $0.27. COOL -10.9% AH. (PR)
: And COOL was like a wet sponge slowly drying up. Its future depends on events largely beyond its control. Why stay invested in a dice roll?
Mar 14, 9:50 PM
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Majesco Entertainment Co is a provider of interactive entertainment software mainly for the casual game playing, mass-market consumer. It sells its products mainly to large retail chains, specialty retail stores, video game rental outlets.