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Silent_Knight
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Financial Investor at a commercial bank in California. In the banking and finance business since 2000 with a lot of experience watching, reading and hearing tips and ideas from articles and clients alike.
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  • IPad Mini: Apples 4th Quarter Bear.

    Apple (AAPL) has yet to announce anything concrete in regards to the next generation of iDevices, but when have they ever? or at least until they have a specialized conference for it. With Google's (GOOG) release of the Nexus tablet they are set to undercut the price of the iPad 3 and try to take some of the tablet market share away from Apple. It's been long rumored since the release of the original iPad but it seems we are finaly just weeks away from an announcement that could bring about concrete evidence of an iPad Mini. When we look at the actual numbers is this actually going to benefit Apple?

    It's well known that most of Apple's revenue is derived from the iPhone. Apples managed to get the production cost down to a minimum and makes a killing off of selling them to the phone companies. The iPad is another story, it creates a profit off each unit sold but is nowhere near where the iPhone is at. How would an iPad Mini do in the scheme of things? Well if we look at the numbers with no tear down we can make a simple estimate, Google sells the Nexus for under $300. I do not the mark up on that but that's where Google may just be trying to get market share. When Microsoft (MS) released the original Xbox, Sony's Playstation 2 dominated the market. It wasn't until Microsoft released the Xbox 360 and introduced it at half the price of the Playstation 3 when Microsoft finally was able to take some market share back from Sony. Microsoft's gaming department suffered losses for 3 straight years before finally being able to produce the 360 at a good price and sell it to consumers for that demanded price. In an economic crises when you can play almost the same game for half the price many people will begin to jump on the bandwagon. Now back to Google, they are essentially trying to just take market share from Apple. If Apple releases the iPad Mini at a price too high for consumers it could see large struggles to sell well with the Nexus offering almost the same experience. If Apple sells it to low they won't make a profit and will only maintain the market share advantage. It all comes down to strategy but regardless, with the Nexus tablet on shelves it will hinder sales of the iPad and iPad Mini. How Apple counters this could change a lot, the production cost and retail price are going to be very important for quarter 4 revenue reports. In my opinion Apple shares will drop in the next couple days with a lot of hype of court and rumors dying down. Not to mention Europe's unsteady finances create a guessing game for the market daily. Around Sept. 1st I would say Apple is a strong buy.

    Disclosure: I am long AAPL.

    Aug 09 3:03 PM | Link | Comment!
  • Did Zynga Just Get Emotional?

    I've been following Zynga (ZNGA) for a while now. I don't own any but like thier potential upside. Thier market cap. of $3.74 billion was always appeasing to me and I can see a bright future with access to over 230 million users. After todays earnings report and 30-40% drop per share they look even more appealing.

    There's far too many good things that happened during this call to think everything is over for Zynga. This is where I considered a large purchase for term growth. One of the easiest ways to earn money during an earnings call is to play peoples emotions. When the storm settles the price will level out and most likely will remain there until they can announce their next upcoming products, which if you follow any news in the past on Zynga you know they have big things in the works. At a price of around $3.20 a share you have the ability to pick up a high volume of shares and make a pretty decent profit when the panic stops and people realize they can get it for 'cheap'. It will go back above $4 shortly, the more I write the more I am considering of staying up late and picking some up in the pre-market. With a large cash balance even after some large purchases this quarter they stand to be aquired for a very high price, or continue to utilize the high user base and cash to aquire the next generation of mobile gaming. Facebook (FB) has their earnings call tomorrow and it could have an effect of Zynga's share price again. If it does, play off of people's emotions, when everyone else wants to get out, find a marginal price and buy while you can. Emotions change very quickly and theirs a reason they bought into a company to begin with. They will be back to drive your price higher and all the attention will bring even more money to the table.

    Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in ZNGA over the next 72 hours.

    Jul 26 8:45 AM | Link | Comment!
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  • Well thats it folks. VRNG won. Waiting on judge to award royalties
    Nov 6, 2012
  • VRNG -Jury on lunch until 1:30pm (EST). I have a good feeling we will get a verdict today, seems like judge already set a certain precedence
    Nov 2, 2012
  • US revenue for Google's claim period to VRNG is about 75B. Wouldn't that be somewhere around $525M as 'fair' compensation? Plus royalties?
    Nov 1, 2012
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