Seeking Alpha


Send Message
View as an RSS Feed
View SunshineNowExcellent's Comments BY TICKER:
Latest  |  Highest rated
  • The executive hemorrhaging at Zynga (ZNGA) continues as VP Roy Sehgal, who created Café World, quits to take a sabbatical from work, while Steve Schreck, a general manager who led the development of a recent hit called "Hidden Chronicles," is leaving to join the mobile gaming start-up of another Zyngal alumnus, Mike Verdu.
     [View news story]
    YOU SAID: "Meanwhile, Zynga tanked while Pincus was at the helm, unlike the other fellows in your example"

    Wrong-oh. Intel in 1976 was facing a business strategy crisis just as Zynga is altering its corporate strategy right now. Intel was producing memory chips. That was Intel's business -- memory chips. It's where they made the vast bulk of their revenue. Andy Grove changed the company strategy to lessen the dependency on memory chips production to focus on microprocessors. THE STOCK TANKED - *TANKED* -- with Andy Grove running the show.

    Your off-the-cuff comments are sad, and your ongoing investment? In the company you don't understand? SELL YOUR OPTIONS, it's clear you have *no* idea why you invested in Zynga.

    *Every* company that alters its business strategy suffers a chickenshit loss of confidence by FAIR-WEATHER-ONLY INVESTORS who didn't know why they were buying the stock.

    Back in 1982, Steve Jobs was running Apple. Apple faced a HUGE strategy challenge and APPLE STOCK TANKED. And Steve Jobs *was* running the company. Their strategy change resulted in betting Apple's fortunes on a GUI operating system, first produced in Apple's "Lisa" computer, then the Macintosh. Apple stock TANKED in 1982 during this business strategy change, similar to the business strategy challenge NOW FACING ZYNGA. Apple was adjusting to the introduction of the IBM PC in 1982. The stock TANKED with Steve Jobs at the helm. TANKED. Just look at Apple's stock price history (you *do* need a history lesson, btw).

    You are a 'fair weather' clueless investor with no idea why you invest in the firms you invest in. When you buy a business, you're NOT BUYING THEIR CURRENT PRODUCT LINE. You're buying their LEADERSHIP, their LEADER'S TALENT, and the ability of their leadership to be able to handle the relentless challenges in the marketplace as it changes.

    Intel survived the memory chips-to-microprocessors strategy change. Andy Grove was the boss at the time and he made the final decision to switch to microprocessors.

    Apple survived the strategic challenge of a huge new competitor (IBM) and Steve Jobs was the boss at the time, and ceded the job to John Sculley when AAPL stock tanked, but Steve came up with what saved Apple -- the GUI operating system, first in the Lisa, then in the Macintosh.
    Dec 3, 2012. 11:54 AM | Likes Like |Link to Comment
  • The executive hemorrhaging at Zynga (ZNGA) continues as VP Roy Sehgal, who created Café World, quits to take a sabbatical from work, while Steve Schreck, a general manager who led the development of a recent hit called "Hidden Chronicles," is leaving to join the mobile gaming start-up of another Zyngal alumnus, Mike Verdu.
     [View news story]
    You're still missing THEE most important fact.
    And one spew that I totally expected to hear, "Mark Pincus is not Steve Jobs" well duh. Steve Jobs was not Andy Grove. Andy Grove is not Larry Ellison. And Larry Ellison is not Meg Whitman. Sheesh. They're all different people.

    But they're all SUCCESSFUL tyrants. Now -- let's have a look at the most important point that I made, and you all missed it, so let me repeat it:

    "I've got a question for all you losers who think Steve Jobs was incapable of purging the weaklings from Apple, those who could not and would not tolerate Steve Jobs tyrant behavior.


    Steve Jobs the Tyrant did (make the final decision on Apple's offerings).
    Meg Whitman the Tyrant did.
    Bill Gates the Tyrant did.
    Andy Grove the Tyrant did.
    Larry Ellison the Tyrant - does.

    As to the comment, "Zynga has no competitive advantage" neither did Apple. Steve Jobs WAS the competitive advantage. Before he came back, Apple was 100% going out of business.

    Zynga is losing people who don't like the Tyrant. But *they* did not make the final decision about Zynga's offerings -- THE TYRANT DID.

    You invest in the SUCCESSFUL TYRANT when he's shown to have excellent savvy in product choice. Mark Pincus has that savvy. It's not perfect -- neither was Steve Jobs' product savvy -- to wit, the Lisa computer; the Newton; and others. But when there are signs that the Tyrant has product savvy -- YOU INVEST IN THAT. You're not investing in subordinates -- they did not create the company's brand, nor the firm's strategy, nor the company's product offering. THEY EXECUTE THE STRATEGY.

    The General (Mark Pincus) is the person you're investing in when you buy ZNGA. *Not* his subordinates.

    Again, none of you have ever worked in a very successful firm, with a well-established brand and lots of customers, that was run by an egotistical Tyrant -- that is obvious. You have no conception of how they can possibly be successful with a really pushy guy leading the company.

    They're not touchy-feely. They are driven. They make the final decisions about what offerings the company has. When they leave, what happens?

    Bill Gates left -- MSFT stock has been 'dead money' for over a decade.

    Andy Grove left -- INTC has also been 'dead money.'

    Steve Jobs left -- AAPL has *tanked* folks. TANKED.

    THE TYRANT, the guy who created the Zynga brand, the guy who was smart enough to originally tie-in to Facebook, and the guy who is smart enough to realize the threat to Zynga if Facebook goes the way of....

    - AOL
    - Friendster
    - MySpace

    the guy who chose Zynga's product offerings -- HE IS STILL THERE! He got Zynga ON to Facebook -- and he's smart enough to recognize the threat to Zynga if Facebook's popularity wanes (it will, it is).

    THE TYRANT, the visionary, the guy who created the brand, who chose the company's highly successful products, the guy who teamed up with Facebook when they were just getting traction -- IS STILL AT ZYNGA.

    YOU INVEST IN THE LEADER. The leader is still there. You might think the leader is no longer making good decisions -- 'he's cutting ties with Facebook' -- fine. I'm quite certain the guy who created the Zynga brand, who chose the firm's highly successful products -- will KEEP MAKING GREAT DECISIONS.
    Dec 2, 2012. 11:35 PM | 2 Likes Like |Link to Comment
  • The executive hemorrhaging at Zynga (ZNGA) continues as VP Roy Sehgal, who created Café World, quits to take a sabbatical from work, while Steve Schreck, a general manager who led the development of a recent hit called "Hidden Chronicles," is leaving to join the mobile gaming start-up of another Zyngal alumnus, Mike Verdu.
     [View news story]
    Two words, a tyrant, yet a legacy:


    Everything being said right now about Mark Pincus was said about Steve Jobs up to the day he died.

    Want to hear what Steve's own wife said about Steve Jobs, *after* he died? "Everyone in Steve's life was expendable. Except Jony Ives."


    I've got a question for all you losers who think Steve Jobs was incapable of purging the weaklings from Apple, those who could not and would not tolerate Steve Jobs tyrant behavior.


    My goodness people, the following 2 things are at work in the comments above:

    1) you have never worked in a HIGHLY SUCCESSFUL tyrant-led organization. I didn't say "tyrant-run organization", I said you have never witnessed nor worked in a SUCCESSFUL tyrant-led organization.

    2) and furthermore, you are 100% convinced that THERE ARE NO *SUCCESSFUL* TYRANT-LED ORGANIZATIONS. You think EVERY SUCCESSFUL FIRM is led by touchy-feely pansies.

    HERE'S A LIST OF SUCCESSFUL egotistical, tyrant-led firms:

    1) Oracle
    2) Apple
    3) eBay (when Meg Whitman was there)
    4) Microsoft (when Bill Gates was there)
    5) Intel (when Andy Groves was there)

    Mark Pincus is culling the freaking herd. "Straight to the bottom", sheesh. You clueless people.

    I'm not saying people like working for tyrants. I'm saying that Tyrants get RID of people who don't like being ultra-subordinate.

    Ask Bill Gates, Larry Ellison, Steve Jobs about being a successful tyrant.

    Sheesh. Zynga is a buy. You're paying for their cash in the bank and getting all their product and business for FREE.
    Dec 2, 2012. 07:08 PM | 1 Like Like |Link to Comment
  • Something Someday Will Kill Facebook, But We're Not There Yet [View article]
    Let's not be so myopic:
    - Compuserve
    - AOL
    - Friendster
    - MySpace
    - Facebook
    -->Next ??<--

    Come on folks, DISCO was so freaking huge in the 1980s, it put Rock-n-Roll out of business - for awhile.

    When people got tired of Disco, a new 'social norm' developed: "disco is a has-been, disco is not 'cool' anymore" and disco vanished quickly.

    Anyone who thinks that a large percentage of FB's users "Simply will not vanish overnight, it can't happen" are very very foolish.

    The 'switching costs' to change to a viable alternative are LOW -- because the content is YOU, YOUR LIFE, and only you experience it, it is always with you -- not with Friendster. Not with MySpace. Not with Facebook.

    'Switching costs' means "the difficulty of switching from A to B".

    'NETWORK EFFECTS' are not "MOAT" for investing purposes. AOL had a huge network. SO WHAT.
    Friendster had a huge network effect. USERS LEFT ANYWAY.
    Myspace had a huge network effect. USERS BAILED FOR Facebook.

    Facebook has no 'moat' technology -- Facebook is 100% based on COMMODITY TECHNOLOGY.

    They make money NOW -- but so did Compuserve -- for awhile.

    So did AOL -- for awhile.
    So did Friendster.
    So did Myspace.
    'NETWORK EFFECTS' did *not* stop their users from bailing out.

    A lot of us are too smart to invest in a dubious commodity-technology firm whose moat is "it has huge network effects and is super cool and has great revenue and Mark is paranoid."

    Nov 19, 2012. 01:49 AM | 2 Likes Like |Link to Comment
  • Why does Apple (AAPL) have a forward P/E of 10 while Amazon (AMZN) has a forward P/E of 100? The reason, as Barron's points out, is "the perception of absolute control at Amazon." Amazon is a company that could generate billions more in annual profits if it didn't invest at a breakneck pace on new warehouses, streaming rights, subsidized hardware, and much else. Thus, Amazon bulls are content to focus on its share gains and healthy gross margin. But if Jeff Bezos plans to put a lid on spending, he isn't tipping his hand[View news story]
    "Greater Fool."

    Compare (from
    AAPL: P/E (ttm): 13.68
    AMZN: P/E (ttm): 2,836.13

    AAPL: Price/sales: 3.66
    AMZN: Price/sales: 1.76

    AAPL: PEG ratio: 0.50
    AMZN: PEG ratio: 8.44

    Amazon looks WAY overbought. Even if Price/Sales dropped to 1 or less, that PEG ratio looks sick, and so does the p/e.

    Greater fools are hanging in there though, aren't they.
    I put this in the same category as people buying gold right now.

    I remember the gold bust in the late 1970s. Oh, everyone was so dang sure gold would not stop its rise. It crashed from 900 to 300 in a minute. And stayed down, 250-300, for over a decade.

    While it's true you can pay for growth -- what if others enter and/or better compete with Amazon in the growing online retail channel? That would cap AMZN's growth. And you cannot say "it hasn't happened yet, so it won't."

    I'm not saying there are no greater fools for AMZN out there. THERE ARE. And here's the rationalization they use to overpay for AMZN: "online retail has a long ways to grow, and Amazon is the dominant force now, and will be then -- when I decide to sell, after Amazon starts having sufficient earnings."

    Walmart is the biggest threat to Amazon. To me, Walmart right now looks like Facebook did in the early days, when Myspace was the biggest social network. The challenger. No one expected Myspace to be eclipsed so quickly.

    There is a huge number of greater fools to buy AMZN. They ignore a couple things, with historical precedents:

    1) there are always 2 large players in a market (Coke/Pepsi, Amazon/Walmart, Apple/Samsung). The least profitable player almost *never* wins over the long term.

    2) Even if you're the #1 player in a market, you can fall out of favor. Apple was the first large-scale maker of personal computers -- they started in 1976. The IBM PC did not come out for 6 years. Then took over the PC market all throughout the 1980s and 1990s, 20+ years. Apple stock tanked.

    If you want to do 'greater fool' investing, rest easy -- right now we are not out of greater fools yet. But it will happen.
    Oct 28, 2012. 11:29 PM | 1 Like Like |Link to Comment
  • Zynga Is Finally Doing Something Right - Buying Its Own Shares [View article]
    Yes but if you buy them back now for $2.50 you can sell them again later at a higher stock price -- if the business delivers. It may just be the firm saying "the market has oversold us, good time to re-acquire some of our float for a later secondary offering" -- the firm invests $200 million now and perhaps thinks to do a secondary in 1, 2 or 3 years and turn the $200m into $1b, as an example. It's a sign the firm thinks their own stock is such a good investment, based on what they know about their own company, it's an impossible good deal to pass up. Sign of confidence in their future. Conversely, if they thought they were in trouble, they would not toss $200 million out to buy shares in a company that they thought might not deliver -- they'd keep their $200m in the bank.
    Oct 28, 2012. 02:42 AM | Likes Like |Link to Comment
  • Don't Buy Zynga Until It Focuses On Mobile And Handheld Games [View article]
    "Buy when there's blood in the streets" -- this company with its first-mover advantage in social gaming, and the rollout of real-money gambling -- first in the UK, then the US when Congress gets the ins-n-outs sorted -- with $1.2Billion dollars cash in the bank -- with the firm the Number #1 games provider on Facebook (Facebook with 1Billion users).......

    This company reminds me of when Amazon was bleeding for its first 3 years as it spent during its 'hockey stick growth' ramp-up period. If you bought Amazon when everyone hated it, you did well.

    "Buy when there's blood in the streets, when everyone hates the stock" -- I'd add to that, "and the segment (social gaming)" is too new for any accurate predictions over the next 3 to 5 years."
    Oct 25, 2012. 12:55 PM | Likes Like |Link to Comment
  • Zynga (ZNGA -4.3%) used Apple's iPad Mini event to fire over 100 workers, claims gaming journalist Ian Miles Cheong. CEO Mark Pincus hinted layoffs were coming following Zynga's ugly Q3 bookings warning. The company has over 2,800 employees. [View news story]
    Mark's management style is *very* reminiscent of the early days at Apple computer, which -- by the way kids -- started in 1976, long before most of you were in a position to know of Apple culture back then. Steve Jobs in his early days made 'growing pains' mistakes as he learned how to manage himself while managing Apple. It's not easy going from zero to one of the most successful brands practically overnight as Steve Jobs found out. Read about why Steve J. got fired -- Steve learned, over time. how to 'manage' his tough taskmaster side and about how to get people on your side and about good PR. Steve did *not* have those skills before his firing from Apple in the 1980s. Mark Pincus is learning too so go easy. Furthermore, many investors in the firm have been looking for signs of culling the herd -- ask Scott McNealy how 'holding on to staff regardless of business conditions' works (not). Mark will keep streamlining the firm -- ADULTS LIKE THAT.
    Oct 23, 2012. 06:03 PM | Likes Like |Link to Comment