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OneCasualObserver

OneCasualObserver
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  • Success On Sale: Activision Blizzard [View article]
    Who in the their right mind would want to own EA unless one is speculating? Price to tangible book is like 43. All of these players are playing into strong market force headwinds. Of course, to each their own with their own money.
    Jan 9 02:09 AM | 1 Like Like |Link to Comment
  • Success On Sale: Activision Blizzard [View article]
    I agree, Charles. Well stated.

    ATVI has had a premium built into the price predicated on stable and even growing WoW subscriptions for several years...

    Kotick reset expectations for 2012 and beyond after the stellar 2011 year when both WoW and the COD franchises were clicking because the comps would have been nearly been impossible to beat. So reading about "beating expectations for several quarters, or even years, in a row is a bit misleading.

    ATVI is a great company with great fundamentals, but market/industry conditions and technical factors appear to offset a great deal of that. The large amount of goodwill bothers me as well and ATVI stopped its share buybacks recently.
    Jan 8 03:37 PM | 1 Like Like |Link to Comment
  • Call Of Duty Can't Save Activision [View article]
    Revenues and operating profits from WoW have been decreasing over time. WoW is NOT the dominant MMORPG it once was, particularly in NA/EU where subscription levels are half of what they once were. Nothing has reversed the ongoing long-term trend.
    Dec 19 07:47 PM | Likes Like |Link to Comment
  • Here's the White House math behind why "tax reform" can't replace all the income from letting the Bush tax cuts for the rich expire: Limiting a cap in deductions to incomes over $250K leaves only $800B in revenue; phasing in a cap to avoid a "cliff" reduces revenues to $650B; excluding the charitable deduction reduces it to $450B. That's why the likeliest outcome is a hybrid approach that combines an increase in marginal tax rates with a cap in deductions. [View news story]
    " Show me one country who through spending cuts has grown the economy?"

    South Korea got hit hard by the Asian crisis and had spending curtailed hardcore in order to receive aid through the IMF. Look where they are at today. A perfect example of what getting one's fiscal house in order can do.
    Nov 30 02:22 AM | 2 Likes Like |Link to Comment
  • Why World Of Warcraft Will Drag Activision Blizzard's Earnings Down [View article]
    Why are you convinced Titan will be a huge success? Launch success like SWOTR or Rift, or long term? Do you even know what kind of financial model Tital is predicated on?
    Oct 20 08:54 AM | Likes Like |Link to Comment
  • Value Play: Activision Blizzard [View article]
    Yep.
    Oct 9 09:57 PM | Likes Like |Link to Comment
  • Value Play: Activision Blizzard [View article]
    I don't agree that this is a value play stock, thank you very much. ROI, ROE, and ROIC, standard measurements for value stocks, are all way to low.

    "Zacks" mentions price-to-book as a favorable metric, but doesn't mention the (7 Bill+?) of goodwill.

    "Zacks" also refers to meeting and surpassing expectations in recent quarters, but doesn't recognize the "expectations reset" that has occurred since the phenomenal 2011 earnings period.
    Oct 2 05:33 PM | 1 Like Like |Link to Comment
  • Look Out Below, Activision Blizzard: Finally A True WOW Killer [View article]
    I'm sure Activision is seeking to expand internationally. But don't neglect the fact that pricing power is substantially lower in China. They don't buy boxes, they don't "subscribe" in the NA/EU sense, and there are revenue sharing/license agreements with NetEase that ultimately will be reflected in the amounts of revenue that ATVI can claim.


    Sep 28 05:56 PM | Likes Like |Link to Comment
  • Look Out Below, Activision Blizzard: Finally A True WOW Killer [View article]
    I missed the initial release of this article. I've never seen an expansion so muted. By now, we usually have a PR notice of the record-breaking sales record. It'll be interesting to see what happens in October and November when the annual pass expires.

    Of course I agree with Stock Jackel. I've been preaching to the choir for the last year about this company. The financials just do not justify a higher stock price without a growing market and top line.

    ATVI has nowhere to climb, but a long way to fall. Best of luck to you that are long. Blizzard and WoW still are extremely strong relatively speaking and WoW will continue to satisfy those die-hard fans and hard-core end-game niche crowds, but investment-wise, the smart money looks for growth, and we haven't really seen it for quite a while.
    Sep 26 11:07 PM | Likes Like |Link to Comment
  • Rumors Around Electronic Arts Should Shine Spotlight On Activision [View article]
    Suppose I were to tell you that this year I'll make $150,000 and next year I'll make $110,000 with margins of 10% on net income both years. If I beat my expectation and make $120,000, am I doing better over time? I am interpreting that I would be by the article's logic. Why don't banks believe that?
    Aug 17 06:11 PM | 2 Likes Like |Link to Comment
  • Has Activision Blizzard Silently Cancelled The Share Buyback? [View article]
    Can't argue with you. I've been trying to track where all this vaunted free cash flow is going..ROE and ROIC, two yardsticks for some investors to gauge short, mid, and long term returns on equity have been very subpar in my estimation (1-2%), particularly relative to other opportunities. This tells me that the company is not effectively producing productive returns on a sustainable basis relative to total capital invested and that capital is more productively used elsewhere. It improved somewhat from 2011 because the company has been reducing total investment equity, but the subpar ROE and ROIC levels seem to be reverting again.

    Some consolation was the dividend and the buyback that would elevate value to an investor on top of ROE or ROIC, but the levels are relatively meager and seem somewhat on shaky footing in terms of a sustained basis.
    Aug 16 03:28 PM | Likes Like |Link to Comment
  • Diablo 3 Shows Why Video Game Companies Are Risky Investments [View article]
    I always enjoy an article that produces arguments that strongly support the thesis. It addresses not only supporting points, but counter-points. I like the objectivity. Thanks.
    Aug 15 06:57 PM | Likes Like |Link to Comment
  • Has Activision Blizzard Silently Cancelled The Share Buyback? [View article]
    Hi Dan,

    I might add that a notable omission is that while share buybacks occurred in April and May. A buyback did not occur in June, at least according to the way I'm interpreting Q2 financial reports. While circumstantial, it certainly adds to to perception of some oddity in their plans with buybacks.
    Aug 15 04:48 PM | Likes Like |Link to Comment
  • Can Activision Blizzard Finally Break $14 [View article]
    It's not a "shouting match" argument Chrisguns521.

    I invest money on enterprises that either present value or present growth as a superior way to achieve ROI. A company that used to make 5 billion dollars a year in revenue now making 4.6 billion dollars in revenue a year now, and possibly less in the future, with a premium already attached to the price offers neither. If I have consistent revenue that compels subscribers to pay the full-price of 3-box games a year on a consistent basis and that revenue diminishes at a rapid rate towards a less consistent and more speculative "by release hit" model, the risk of the investment is inherently higher and one has to have a higher appetite for faith that each and every release will be a hit, bigger than the last one. Some people have that faith and you are probably one of them. I envy you, yet at the current moment I see better returns at less risk elsewhere given the macro and market pressures evidenced in ATVI operational characteristics right now.

    A game forum argument is a game forum argument. You argument might work with gamers, but not with investors that have the same concerns I have, and not all investors have the same concerns as I do. I just like my money -- what can I say?
    Aug 6 07:16 PM | Likes Like |Link to Comment
  • Can Activision Blizzard Finally Break $14 [View article]
    Pricing power was a real competitive advantage of ATVI, reflecting monopolistic control to a degree. This power seems to be slipping. I use the Diablo III annual pass cannabalization strategy, early level FTP options, and a 39.99 expansion release price for MoP relative to previous expansion prices as my motivating evidence. Unless my recollection is faulty, previous expansions that were non-CE went for $59.99 initially.
    Aug 6 06:29 PM | Likes Like |Link to Comment
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