5 ‘China internet’ trends to watch out for in rest of 2015: Barclays - Industry consolidation/privatisation, O2O (online to offline) market continues to grow, E-commerce extends to cross border, Mobile gaming growth moderates, Increasing collaboration between internet and offline industries
CORSAIR EARNINGS PLAY, The DD you've been waiting for
Corsair Gaming ($CRSR) Redefining gaming, eSports, and streaming Company Overview Corsair Gaming is an American computer hardware and peripherals company founded in 1994 and headquartered in California. They acquired Elgato Gaming in 2018 to expand to the streaming gear market, Origin PC and SCUF gaming in 2019 to expand into the custom-built PC systems and console controllers markets, respectively, and during 2020 they acquired Gamer Sensei and EpocCam, and partnered with Pipeline to grow into the gaming and streaming coaching market. Corsair went public on September 23, 2020, with its IPO priced at $17, valuing the company at about $1.3B. Understanding the Business Value Proposition Corsair provides specialized, high-performance gear for gamers and streamers. Their products are designed to provide speed and reliability for competitive gaming, high quality content for streamers, and powerful PC components that allows gamers to run modern games smoothly. Revenue Streams Currently, Corsair groups its product offering into two segments: gamer and creator peripherals and gaming components and systems. Gamer and Creator Peripherals: which represents around 25% of net revenue, includes gaming mice, keyboards, and headsets, streaming gear, and high performance console controllers. Gaming Components Systems: which represents around 75% of net revenue includes computer cases, power supply units (PSU), high performance memory products (40% of net revenue), and custom-built gaming systems. Acquisitions and Partnerships: During 3Q 2020 Corsair acquired Gamer Sensei, a gaming coaching platform, EpocCam, an app that allows iPhones to serve as a webcam, and partnered with Pipeline, a course-based education platform for streamers. Industry Market Size According to Jon Peddie Research, the global gaming and streaming gear markets is expected to reach $40B by the end of 2020. Before the pandemic JPR estimated the market to grow at a modest 1.05% CAGR until 2022. However, during 2020 the market has grown an estimated 10% year-over-year. Additionally, DFC Intelligence research estimated that the video-game coaching market surpasses $1B. Industry Fundamentals Growth in the gaming and streaming gear industries are driven by strong and robust fundamentals. Popularity of gaming is increasing: According to Newzoo, there are an estimated 2.7B gamers worldwide, which are expected to spend $159B on games in 2020 and is expected to grow at an 8.3% CAGR to exceed $200B by 2023. PC and console gaming represents 51% of the total market, and mobile gaming 49%. Corsair has stated that currently there is no interest in expanding to the mobile gaming market. Tech-driven improvements in game quality: Advances in computer power have enabled gaming platforms to provide increasingly immersive experiences. This in turn, places increased demand on high-performance computing hardware. Increasing gaming and streaming engagement: Some interesting facts reported in the Limelight Networks’ State of Online Gaming 2019 research report include:
On average, video gamers spend six hours and 20 minutes each week playing video games
More than 38% of gamers would like to become professionals if it could support themselves
Gamers from novice to aspiring professionals report missing daily activities due to gaming, missed sleep is the most pervasive
Watching gamers play video games online is more popular than watching traditional sports for 18-25 year olds.
The eSports and streaming flywheel The rise in popularity and viewership of eSports brings more investment from publishers, sponsors, advertisers, team owners, and leagues to the eSports industry. Increased investment brings more players and increased performance focus of gamers who advance from less engaged gaming to high-performance gameplay, which in turn brings more viewers. Competitive Landscape & Risks Competition The gaming and streaming market is characterized by intense competition, constant price pressure and rapid change. Competition across Corsair’s product offering includes: Gaming keyboards and mice - Logitech and Razer Headsets and related audio products -Logitech, Razer, and HyperX Streaming gear - Logitech and AVerMedia Performance controllers - Microsoft and Logitech PSUs, cooling solutions, and computer cases - Cooler Master, NZXT, EVGA, Seasonic, and Thermaltake High performance memory - G.Skill, HyperX, and Micron Pre-built and custom-built gaming PCs - Alienware (Dell), Omen (HP), Asus, Razer, iBuypower and Cyberpower Competitive Strategy The company follows a differentiation leadership strategy by prioritizing high-performance and professional quality and charging a price premium on their products in exchange for superior quality, high value added features, and superior brand recognition. Market Share According to NPD Group, by 2020 Corsair had #1 market share position in the US in its gaming components and systems products with 42% of the market share from 26% in 2015. Their gamer and creator peripheral products are not yet market leaders, however, the company increased its market share in that segment from 5% in 2013 to 18% by 2020 in the US. Growth Strategy Move into the Asia Pacific region: The Asia Pacific Region represents a long-term growth opportunity. According to Newzoo, they represent 54% of the global gaming community. Complimentary acquisitions: Corsair has carried out this strategy aggressively since 2018 with the acquisitions of Elgato Gaming, Origin PC, SCUF and Gamer Sensei. They plan to continue evaluating and pursuing new acquisitions that may strengthen their competitive position. New Markets: Uses of streaming gear has spread into areas including, podcasting, video blogging, interactive fitness, remote learning, and work-from-home, which represent a promising avenue for continued expansion in this product segment. Threat of New Entrants Because of the continued convergence between the computing devices and consumer electronics markets, increased competition from well-established consumer electronics companies is expected in the gaming and streaming peripherals segment (e.g. use of Audio-technica microphones by streamers). Threat of Substitution A significant medium- to long-term risk for Corsair’s business model is the evolution of cloud computing and augmented/virtual reality entertainment. Cloud computing refers to a computing environment in which software is run on third-party servers and accessed by end users over the internet, requiring minimal processing power from the end-user’s system. Through cloud computing, gamers will be able to access and play sophisticated games without the need of expensive high-performance PC systems and components. According to Grand View Research, the global cloud gaming market is expected to grow at a CAGR of 48% from 2020 to reach $7.2B by 2027. Additionally, Corsair must be able to adapt its product offering to meet the needs of the evolving augmented/virtual reality industry. Moats There does not seem to be any relevant, structural moats, that may prohibit competitors from capturing Corsair’s market share across their product offering. Other Relevant Risks Due to the concentration of their production facilities in Taiwan and China, Corsair may be adversely by geopolitical tensions and trade disputes. Financial Summary Proforma Balance Sheet https://postimg.cc/QHgY1ZxL Income Statement https://postimg.cc/qNkbGDzN For the 9 months ended September 2020 compared to the same period last year: The 49% increase in net revenue is mostly attributed to a large number of consumers gaming and working from home during the COVID-19 pandemic. The company’s gross margin is influenced by its product mix for the period, gamer and creator peripherals have a higher gross margin (25-35%) than gaming components and systems (15-25%). Proforma Cashflow Statement https://postimg.cc/XXCzNyRY Cash used in investing activities consists primarily on the acquisitions of Elgato in 2018, and SCUF and Origin PC in 2019. Peer Comparison https://postimg.cc/Whcfd1V6 Logitech International (LOGI) and Micron Technologies (MU) Why am I posting this now? I believe they are going to have very strong 4th quarter 2020 earning results. 2020 had record pc sales,and pc video games has reported record numbers of players. They are in my opinion the leading pc peripherals brand for gamers. Q4 Earnings Include both Black Friday and Christmas Sales Record pc sales: https://www.businesstoday.in/technology/news/record-pc-sales-in-2020-as-covid-limits-work-education-to-homes/story/427858.html#:~:text=According%20to%20the%20latest%20data,units%20in%20Q4%20of%202020&text=COVID%2D19%20pandemic%20has%20turned,personal%20computer%20(PC)%20industry%20industry). Google trends: https://imgur.com/oKPn6R5 My price target for this earnings: $65 EDIT: (EOM) TLDR: $CRSR will crush Q4 earnings🚀 🚀 🚀🚀 🚀 🚀🚀 🚀 🚀 Position: 60 Contracts 40c exp 2/19 disclaimer: I am not a financial advisor. DO YOUR OWN RESEARCH credit: u/italiansomali and u/erythaean
Corsair Gaming ($CRSR) Redefining gaming, eSports, and streaming Company Overview Corsair Gaming is an American computer hardware and peripherals company founded in 1994 and headquartered in California. They acquired Elgato Gaming in 2018 to expand to the streaming gear market, Origin PC and SCUF gaming in 2019 to expand into the custom-built PC systems and console controllers markets, respectively, and during 2020 they acquired Gamer Sensei and EpocCam, and partnered with Pipeline to grow into the gaming and streaming coaching market. Corsair went public on September 23, 2020, with its IPO priced at $17, valuing the company at about $1.3B. Understanding the Business Value Proposition Corsair provides specialized, high-performance gear for gamers and streamers. Their products are designed to provide speed and reliability for competitive gaming, high quality content for streamers, and powerful PC components that allows gamers to run modern games smoothly. Revenue Streams Currently, Corsair groups its product offering into two segments: gamer and creator peripherals and gaming components and systems. Gamer and Creator Peripherals: which represents around 25% of net revenue, includes gaming mice, keyboards, and headsets, streaming gear, and high performance console controllers. Gaming Components Systems: which represents around 75% of net revenue includes computer cases, power supply units (PSU), high performance memory products (40% of net revenue), and custom-built gaming systems. Acquisitions and Partnerships: During 3Q 2020 Corsair acquired Gamer Sensei, a gaming coaching platform, EpocCam, an app that allows iPhones to serve as a webcam, and partnered with Pipeline, a course-based education platform for streamers. Industry Market Size According to Jon Peddie Research, the global gaming and streaming gear markets is expected to reach $40B by the end of 2020. Before the pandemic JPR estimated the market to grow at a modest 1.05% CAGR until 2022. However, during 2020 the market has grown an estimated 10% year-over-year. Additionally, DFC Intelligence research estimated that the video-game coaching market surpasses $1B. Industry Fundamentals Growth in the gaming and streaming gear industries are driven by strong and robust fundamentals. Popularity of gaming is increasing: According to Newzoo, there are an estimated 2.7B gamers worldwide, which are expected to spend $159B on games in 2020 and is expected to grow at an 8.3% CAGR to exceed $200B by 2023. PC and console gaming represents 51% of the total market, and mobile gaming 49%. Corsair has stated that currently there is no interest in expanding to the mobile gaming market. Tech-driven improvements in game quality: Advances in computer power have enabled gaming platforms to provide increasingly immersive experiences. This in turn, places increased demand on high-performance computing hardware. Increasing gaming and streaming engagement: Some interesting facts reported in the Limelight Networks’ State of Online Gaming 2019 research report include:
On average, video gamers spend six hours and 20 minutes each week playing video games
More than 38% of gamers would like to become professionals if it could support themselves
Gamers from novice to aspiring professionals report missing daily activities due to gaming, missed sleep is the most pervasive
Watching gamers play video games online is more popular than watching traditional sports for 18-25 year olds.
The eSports and streaming flywheel The rise in popularity and viewership of eSports brings more investment from publishers, sponsors, advertisers, team owners, and leagues to the eSports industry. Increased investment brings more players and increased performance focus of gamers who advance from less engaged gaming to high-performance gameplay, which in turn brings more viewers. Competitive Landscape & Risks Competition The gaming and streaming market is characterized by intense competition, constant price pressure and rapid change. Competition across Corsair’s product offering includes: Gaming keyboards and mice - Logitech and Razer Headsets and related audio products -Logitech, Razer, and HyperX Streaming gear - Logitech and AVerMedia Performance controllers - Microsoft and Logitech PSUs, cooling solutions, and computer cases - Cooler Master, NZXT, EVGA, Seasonic, and Thermaltake High performance memory - G.Skill, HyperX, and Micron Pre-built and custom-built gaming PCs - Alienware (Dell), Omen (HP), Asus, Razer, iBuypower and Cyberpower Competitive Strategy The company follows a differentiation leadership strategy by prioritizing high-performance and professional quality and charging a price premium on their products in exchange for superior quality, high value added features, and superior brand recognition. Market Share According to NPD Group, by 2020 Corsair had #1 market share position in the US in its gaming components and systems products with 42% of the market share from 26% in 2015. Their gamer and creator peripheral products are not yet market leaders, however, the company increased its market share in that segment from 5% in 2013 to 18% by 2020 in the US. Growth Strategy Move into the Asia Pacific region: The Asia Pacific Region represents a long-term growth opportunity. According to Newzoo, they represent 54% of the global gaming community. Complimentary acquisitions: Corsair has carried out this strategy aggressively since 2018 with the acquisitions of Elgato Gaming, Origin PC, SCUF and Gamer Sensei. They plan to continue evaluating and pursuing new acquisitions that may strengthen their competitive position. New Markets: Uses of streaming gear has spread into areas including, podcasting, video blogging, interactive fitness, remote learning, and work-from-home, which represent a promising avenue for continued expansion in this product segment. Threat of New Entrants Because of the continued convergence between the computing devices and consumer electronics markets, increased competition from well-established consumer electronics companies is expected in the gaming and streaming peripherals segment (e.g. use of Audio-technica microphones by streamers). Threat of Substitution A significant medium- to long-term risk for Corsair’s business model is the evolution of cloud computing and augmented/virtual reality entertainment. Cloud computing refers to a computing environment in which software is run on third-party servers and accessed by end users over the internet, requiring minimal processing power from the end-user’s system. Through cloud computing, gamers will be able to access and play sophisticated games without the need of expensive high-performance PC systems and components. According to Grand View Research, the global cloud gaming market is expected to grow at a CAGR of 48% from 2020 to reach $7.2B by 2027. Additionally, Corsair must be able to adapt its product offering to meet the needs of the evolving augmented/virtual reality industry. Moats There does not seem to be any relevant, structural moats, that may prohibit competitors from capturing Corsair’s market share across their product offering. Other Relevant Risks Due to the concentration of their production facilities in Taiwan and China, Corsair may be adversely by geopolitical tensions and trade disputes. Financial Summary Proforma Balance Sheet https://postimg.cc/QHgY1ZxL Income Statement https://postimg.cc/qNkbGDzN For the 9 months ended September 2020 compared to the same period last year: The 49% increase in net revenue is mostly attributed to a large number of consumers gaming and working from home during the COVID-19 pandemic. The company’s gross margin is influenced by its product mix for the period, gamer and creator peripherals have a higher gross margin (25-35%) than gaming components and systems (15-25%). Proforma Cashflow Statement https://postimg.cc/XXCzNyRY Cash used in investing activities consists primarily on the acquisitions of Elgato in 2018, and SCUF and Origin PC in 2019. Peer Comparison https://postimg.cc/Whcfd1V6 Logitech International (LOGI) and Micron Technologies (MU) Why am I posting this now? I believe they are going to have very strong 4th quarter 2020 earning results. 2020 had record pc sales,and pc video games has reported record numbers of players. They are in my opinion the leading pc peripherals brand for gamers. They also have strong support from wallstreetbets. Record pc sales: https://www.businesstoday.in/technology/news/record-pc-sales-in-2020-as-covid-limits-work-education-to-homes/story/427858.html#:~:text=According%20to%20the%20latest%20data,units%20in%20Q4%20of%202020&text=COVID%2D19%20pandemic%20has%20turned,personal%20computer%20(PC)%20industry%20industry). Google trends: https://imgur.com/oKPn6R5 My price target for this earnings: $55 disclaimer:I am not a financial advisor. Do not trade based on the information I have posted. credit: u/italiansomali and u/erythaean
$GME DD- Fundamentals: Why WSB Just Bought a Value Stock.
I saw u/Unlucky-Prize post about the technical factors for $GME and felt inspired to make a post about the reasons why I‘m long this stock, which is the fundamentals. I don’t do options or techincal analysis so please refer to other posts for that info. $GME had been on my radar for quite some time but I finally dipped my toes in two weeks ago. The basis for that wasn’t the potential for a short squeeze or short interest but the underlying fundamentals behind $GME. I had posted a long comment in a previous thread and will expand on that to explain why I’m bullish long term for $GME. I hope this helps. This post is meant to be a personal opinion and not advice to buy or sell Gamestop. 🐻 Case:
Digital sales will make Gamestop the next Blockbuster.
The digital game sales argument, like all 🐻 arguments, are weak. The shift to digital will possibly occur in the next console cycle. So maybe the 🐻 are right, but they’re right in 8 years which means they’re wrong now. Additionally digital sales growth has decelerated and are returning to pre-covid levels as more people go back to stores. This trend should continue if the pandemic improves. Additionally game publishers don’t care about the fractionally larger margins from selling digital direct. They only care about moving as many units as quickly as possible. If they could sell the games on floppy disks they would. Go read the public filings for any game publisher and they will tell you that they only care about selling what customers want and guess what, they still want physical. Blockbuster died because Carl Icahn got involved, killed Blockbuster’s attempt to pivot to a Netflix model by offering an online rental service and Blockbuster’s old business model relied on late fees. Icahn insisted that Blockbuster's greatest asset was its physical location and late fees, killed the pivot and forced them to triple down on their old strategy. Carl ended up losing 98% of his investment in Blockbuster. There continues to be demand for physical movie rentals as evidenced by Red Box locations and Netflix still has a few million dvd by mail subscribers. Gamestop has also recently started to pivot away from software sales into other areas and now software sales now make up large minority of Gamestop's total sales. They're pivoting more towards physical goods and not just Funko Pops but also plan to expand more into new areas like PC gaming and hardware. Everyone knows that they signed a revenue agreement with Microsoft where Gamestop will get a cut of the lifetime revenue from Xbox Game Pass Ultimate. This shouldn't sour the relationship with Sony or Nintendo. If anything, Sony and Nintendo should be compelled to offer a similar revenue share agreement because Gamestop will inevitably push Microsoft products if Gamestop stand to profit more from it. This will be a bigger deal in later years as console availability increases and consumers actually deciding to cross shop consoles as opposed to getting whichever new one is available right now. Sony and Nintendo won't stop selling products through Gamestop because of this agreement with Microsoft, it's too large of a sales channel to give up.
Gamestop will go bankrupt
This is highly unlikely to happen. Gamestop managed to survive the single worst brick and mortar retail sales environment in modern history and ended the year with a cash surplus of a few hundred million. Now its the new year and the beginning of a new console cycle. This console cycle should last as long as the previous ones which is close to a decade, plus or minus a few years. During that time, they will be printing money hand over fist selling consoles, new games, used games, accessories, protection plans, etc.
Brick and mortar retail is dead. Gamestop locations are shutting down left and right, this must mean they're going bankrupt.
Gamestop's average lease durations are actually quite short. A lot of brick and mortar shops have lease duration lasting a decade but the average lease duration for Gamestop is just 2-4 years. This allows them to close underperforming stores and open new ones very quickly. Gamestop's saw e-commerce grow by 250% last quarter. The company has been and continues to pivot towards a "digital-first, omni-channel ecosystem for games and entertainment" 🐂 Case This MOASS could be long and protracted like Tesla in all of 2020 as many continue to bet against Gamestop, instead of a sharp spike like Volkswagen, where Porsche played a large role in spiking the share price. Keep in mind that at 1x sales, the share price should be $80-100. Compare that with another retailer Chewy, which has a p/s of 6-7x. Pet products also has a much lower TAM than gaming. This isn’t even factoring in a complete turnaround that RC has to be planning. Look at the newest board composition. Newest members are Reggie (my body is ready), the head of cloud 9 esports, and the current president Petsmart and Chewy. board member. Ask yourself, are these the people that would join the board of a company that is expected to die in 5 years due to digital game sales. This has moved beyond a short squeeze yolo to a long term hold. If RC succeeds in transforming this into the next Chewy, you’re looking at a 20x multiple. This is based on fundamentals and industry tailwinds. I added 10k shares weeks ago and added 20k shares at $38 because this thing is going much higher and idgaf about a few bucks in share price right now. Also don’t attempt to time the market because you could be left behind at the launchpad. Simply put, if I told you there was a business that served a $200 billion total addressable market with very discerning and loyal customers with a lot of disposable income to spend on this market. They have over 5,000 retail locations all across the world. Last quarter, they saw Ecommerce grow by nearly 300% and ended a year where many other brick and mortar retailers went bankrupt with hundreds of millions of dollars in extra cash. This company has a database called PowerUp consisting of tens of millions of customers that pay them a yearly premium membership. They're starting a multiyear pivot into several new growing areas and have new board members that are industry leaders in each of those respective areas at the start of a new product launch cycle that will last a decade. A young visionary founder who made his billions by creating a customer centric experience that defeated Amazon, who is well known to focus on one idea to the point of obsession, just became this company's largest shareholder and now controls the board. I tell you this company trades at .5 sales. Would you short or long this company? TLDR: 🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀 But not because of the MOASS. Edit: I forgot I had 5000 shares in my YOLO account so position is actually 35,000 GME
Ark has been a big name in SPACs, investing in general in 2020/2021, and followed closely on this subreddit. They have invested in SPACs including HIMS, OPEN, LGVW, and EXPC, which often saw an increase in trading price after Ark's involvement. Names such as SRAC and NPA also received a boost with the announcement of the Ark Space ETF. So it is helpful to understand what Ark is looking at when investing in SPACs. Ark released their "Big Ideas 2021" presentation last week. The below goes through the high level industries and ideas Ark is looking at, as well as relevant SPACs to those industries/ideas. While these SPACs are not listed by Ark in the presentation, they are my summary of those that fit, and poised to benefit from, the themes Ark lays out.
Deep Learning: AI/Computer written software code
Key SPAC Names: SAII, ACEV, THBR
Ark mention autonomous vehicles (among many other end markets). While this is focused more on software, SAII recently rumored to be in talks with Otonomo, an Israeli startup that operates a data platform linked to millions of connected cars.
Ark also mention a jump in specialized chips in this section (don’t specifically say FPGAs [ACEV] or SOCs [THBR], but could be applicable).
SPAC names I wouldn't include, but related: GRAF/VLDR, GMHI/LAZR, IPV, CLA, CGRO, CFAC (rumored)
While autonomous is mentioned, the focus is more on deep learning software and chips enabling it than the LiDAR players, so don’t include them here.
The Re-invention of the Data Center: Data centers shifting to new hardware, such as ARM, RISC-V, GPUs, TPUs, and FPGAs
Key SPAC Names: ACEV
A lot of this section is about ARM processors. But, they specifically mention accelerators, including FPGAs, replacing CPUs. ACEV target Achronix is one of the few independent FPGA producers.
SPAC names I wouldn’t Include, but related: THBR
FPGAs specifically mentioned, but no mention of SOCs or autonomous, so don’t think THBR as applicable here.
Virtual Worlds: Virtual reality, augmented reality, metaverse, and other futuristic steps in the design and monetization of video games
Key SPAC Names: FEAC/SKLZ
Virtual Gaming: Around virtual worlds, Roblox IPO is a prime target, although this section talks about areas outside of just Vmetaverse. They talk about different methods of monetizing video games, which SKLZ (former FEAC SPAC) fits well with.
SPAC names I wouldn't include, but related: LCA/GNOG, DMYD, DMYT/RSI, DEAC/DKNG
Online Gambling: While the online gambling players are technically “gaming”, this section seems more focused on video game monetization than gambling, so I don’t include them.
Digital Wallets: Online first financial accounts, banking, and lending platforms
VIH immediately comes to mind as the SPAC whose presentation talks specifically about digital wallets. But it appears that they are also talking about online-based banking services here, which can broaden potential targets to include IPOE/SoFi (only SPAC explicitly mentioned by Ark), the rumored FUSE/MoneyLion deal, the rumored Payonee FTOC merger
They also mention digital lenders, which could include NEBU/LPRO or FSRV (don’t mention either, but mention FSRV partner AFFM)
SPAC names I wouldn't include, but related: FTAC/PAYA & SPRQ
Fintech payment enabling fintech SPACs, but they aren’t really digital wallets/consumer focused.
Bitcoin: No explanation needed on this, they dedicated a section to the world's largest cryptocurrency
Key SPAC Names: VIH
Digital Wallet: While crypto exchanges and other bitcoin-related names have been rumored to potentially be evaluating SPACs, VIH is the only crypto-related name currently in the SPAC universe
Electric Vehicles: An area well covered on this subreddit, EVs are another key sector pointed out by Ark.
EV OEMs: The major EV OEM SPACs are obvious candidates here, being SHLL/HYLN, DPHC/RIDE, SPAQ/FSR, HCAC/GOEV, VTIQ/NKLA, ACTC, CIIC, NGA, FIII, GIK, PSAC, CCIV (rumor)
EV Parts: Parts suppliers, such as KCAC/QS, PIC/XL, RMG/RMO, and ALUS are also all poised to benefit from electrification
EV Charging Stations: The EV Charging stations, such as CLII, TPGY, SBE, are all going to see great benefit from further EV adoption
Raw Materials: FVAC/MP is also exposed to broader EV trends via NdPr output at the mine, which is currently used in 90% of EVs
FCEV Parts: AMCI is acquiring a fuel cell provider, which are used for FCEVs and mentioned throughout their presentation
Semiconductors: THBR’s semiconductors are being used for electrification, among other auto-based end markets. ACEV is similar, with their FPGAs being used for the future of the auto-market.
SPAC names I wouldn't include, but related: TRNE/DM
TRNE talks about how additive manufacturing enables EVs, among many other industries, although it’s not a key focus/driver.
Automation: Robotics factories, production, and manufacturing. Do not know of any SPACs in this area currently.
Autonomous Ride Hailing: Specifically looking at robo-taxis
LiDAR: While Ark’s thesis is looking more at the platform providers, any autonomous driving will be enabled by the LiDAR providers GRAF/VLDR, GMHI/LAZR, IPV, CLA, CGRO, CFAC (rumored)
Semiconductors: THBR is looking to produce semi’s for “safety systems” for future vehicles (autonomous). ACEV is similarly looking to use their FPGAs for the future of cars.
SPAC names I wouldn't include, but related: SHLL/HYLN, DPHC/RIDE, SPAQ/FSR, HCAC/GOEV, VTIQ/NKLA, ACTC, CIIC, NGA, FIII, GIK, PSAC, CCIV (rumor)
EV OEMs: While it’s possible the major EV OEMs could have autonomous vehicles, and some even mention this, it is not as key to their investment thesis as the electrification side
Drone Delivery: Autonomous air travel, mostly for ecommerce delivery and passengers
Key SPAC Names: Haven’t seen any SPACS that really relate to this theme
SPAC names I wouldn't include, but related: EXPC, ASPL (rumor), ZNTE (rumor)
The Ark presentation seems to mostly be mentioning eCommerce-type fulfilment, although there is some discussion of autonomous passenger deliver
Orbital Aerospace: Space-related names including connectivity and hypersonic point-to-point travel
Key SPAC Names: SRAC, IPOA/SPCE, NPA
Satellite Launch/Positioning: SRAC is likely the most relevant, as it specializes in putting satellites into their proper orbit.
Space-based Connetivity: NPA also helps enable space-based communication, which Ark mentions.
Hypersonic Point-to-Point: And finally, Ark mentions hypersonic point-to-point travel, which IPOA/SPCE is looking to get involved in
3D Printing: Another straight forward one, Ark thinks additive manufacturing will revolutionize manufacturing
Key SPAC Names: TRNE/DM
3D Printing: DM is a 3D printer, this one is clearly the most applicable
Long Read Sequencing: DNA sequencing (think ILMN), the next step is those who can perform longer "reads" of DNA (PACB, Oxford Nanopore). I have not seen any SPACs targeting this area.
Multi-Cancer Screening: Looking at liquid biopsies/blood tests for early cancer detection.
Key SPAC Names: CNAC/DMTK
SPAC names I wouldn't include, but related: VGAC
Genetic Testing: VGAC is rumored to be in discussions with 23andMe. Their current product is mostly around ancestry testing, but they also are looking to do health screening per the Bloomberg article. Still, Ark is focused mostly on cancer testing, and there is no evidence they are specializing in cancer screening.
Cell & Gene Therapy Generation 2: Self-explanatory, cell and gene therapies, Ark looks at the next stage shifting from liquid to solid tumors, autologous (cells from yourself) to allogeneic (cells from anybody) cell therapy, and ex vivo to in vivo gene editing.
Key SPAC Names: GXGX
Allogenic Gene Therapy: Ark specifically talks about allogenic therapies, of which GXGX is acquiring one.
None of the above is supposed to be investment advice, a recommendation to buy, or suggest Ark is or will be involved at all in any of the above names. Do your own due diligence. I and others I advise own positions in some of the above securities Edit: Added BFT to "Digital Wallets" and CNAC/DMTK to "Multi-Cancer Screening"
[$SE] Multi-year Emerging Market Growth - This is the Way
Alright, listen up my fellow autists. I was drafting this DD up to put in my private archives, but this place isn't autistic enough anymore. Apes are too alpha with their diamond hands and I'm here to bring you some plays to put tendies on the table like good ol days. I'm here to talk about what's for some reason an under followed stock. $SE BUT WHAT IS $SE?!?!?!? Sea Limited is a leading E-commerce, digital payments, and mobile gaming company based in Southeast Asia NOT COMMIE TOWN CHINA (disclaimer I'm long $BABA). They operate through those three segments and benefit from synergies between them. Let's start with E-commerce It's the middle of a fucking GLOBAL PANDEMIC. I bet your house is filled with cardboard boxes up to the ceilings. At least mine is. I'm buying a lot of shit online, because I'm working from home, trading in my PJs and making FAT STACKS off $SE. While I don't live in Malaysia, I use Amazon. It's the future. Look at the entire brick and mortar retail industry over the last 5-10 years cough GME cough. Things aren't so hot. You can get things cheaper and exactly what you want. I feel this part of the thesis is pretty self explanatory. Do you believe people will continue to buy things online over the next 10 years?
Yes -> buy $SE
No -> Go buy GME lol
But how are they doing? FUCKING GREAT. I have access to some proprietary app data I'm too lazy to smuggle off my work PC, but let me say. Things are UP. Downloads, DAU, session length, all the metrics. BOOMIN. Don't believe me? Here's how they've been doing vs. local competitors ($BABA owned Lazada) and a private company rumored to be involved with a one of those special purpose tickers (Tokopedia). $SE mainly competes in its e-commerce segment in the Southeast Asia market. It's key countries are Malaysia, Singapore, Indonesia, Philippines, Taiwan, Thailand, Vietnam, and Brazil. As shown here using google trends, we see that Shopee is now claiming the top spot in relative search interest in many of these markets. Gaining Share/Interest over competitors in recent years ShopeeBlue-LazadaRed-TokopediaYellow Source:https://trends.google.com/trends/explore?date=today%205-y&q=shopee,lazada,tokopedia Current Growth Rates Digital Payments. $SE also has a digital wallet app. This is Southeast Asia. They don't have JP Morgan pulling from everyone's pockets. Everyone's got a phone and uses this in tandem to purchase things online. Did I mention that $SE has both B2C and C2C shopping apps? Want to transact with local business? Process payments and handle your small business checking through $SE. Makes it easy to track and receive payments from customers. Fucking great. Basically lets the company pull a sliver from every transaction going on in their markets. Not a compelling YOLO worthy investment on it's own but bolsters the package, just like how stuffing a sock bolsters my cock. Mobile Gaming. What's that? Boom Beach is for dads? I know. Doesn't matter, the rest of the world loves this shit. Their mobile gaming division is called Garena and their biggest game is a battle royale called Free Fire:
Garena is a leading esports organizer. It hosts esports events around the world that range from grassroots local tournaments to some of the most viewed professional esports competitions globally. Garena’s largest global esports tournament of 2019, the Free Fire World Series, achieved over 130 million cumulative online views.
Somehow, this shit fills stadiums. And growth don't stop. Why it's interesting? Recent IPO (relatively). This thing is less than 2 years public and absolutely on a tear. Market cap of $140 billion is especially compelling. Consider that the e-commerce growth is the fastest in the world in their markets.. It's a company you value on the top-line. So in a region with 8-10% GDP growth, and 10%+ ecommerce growth it's easy to make a case for 20% top-line growth on right there. Now lets consider an increasing shift in spend from brick and mortar to digital of 10% (you make 1 out of 10 purchases online more than you did last year) and gaining market share. 50% growth isn't hard to achieve on this piece of the business alone. And that's ANNUAL. How to play it? LEAPS. Shares are for apes and frees up cash for FDs on pull backs (if it drops more than 10% hammer the ask on all the 20% OTM 60 DTE you can get). TL;DR? EDUCATE YOURSELF AND READ IT. THERE WILL BE MORE TO COME. $SE $350 2023 Cs - This is the way
$EGLX.to - Epic eSports stock about to uplist to the Nasdaq
TLDR; EGLX.to is the single best pure-eSports play in the world.
Look I have an incredible track record of getting lucky picking stocks in the new reddit dominated market (PLTR, U, AI, BB, etc) and I want to tell you all about my next big one: Enthusiast Gaming. While our community has nearly quadrupled in size, I still believe EGLX is one of the most underappreciated plays out there. Since writing my first DD on EGLX, a few things have transpired:
The stock has gone up like 80%.
EGLX signed a massive deal with Samsung and Samsung will be the official sponsor of their 7 eSports teams.
EGLX has strengthened their balance sheet by $50M, taking care of the cash risk I identified in the original DD.
The stock price has formed some significant resistance, and has a solid foundation above $6.
Call of Duty has had their best year in franchise history, and was crowned the best selling game of 2020 -> Great news for a company who owns 1 of 12 professional COD esports licenses.
One of EGLX's streamers, xQc, found his way to the top of WSB... indicating people on that forum follow EGLX, but they just don't know it yet.
Their recent bought deal is set to conclude this week, and I am hoping for big news on their Nasdaq application to follow shortly thereafter.
Last and probably least, I was personally right again and won big again, in both BB and GME. And yes I realized my gains in both. So for whatever it's worth, I have proven my track record again.
Get in before the Nasdaq listing if you like money. Positions: I currently have 40% of my portfolio in Enthusiast Gaming. I hope the mods don't mind, but I wanted to repost this DD I wrote about a month ago, because it seems like none of the noobs know about the Enthusiast Gaming eSports revolution. So here it is below: --------------------------------------------------------- LINKto original post -POSTED JAN 6TH 2020: Greetings friendos. It's 12:20 AM where I live and since I can't sleep, I have decided to finally write a DD on Enthusiast Gaming that I have been thinking about for some time... EGLX is a stock that I believe can make you 5-20x gains in the next year. I have been watching this stock since like $1.50 during the darkest days of COVID, and I am kicking myself for not getting in until $4 just before Christmas. But I am now a proud shareholder preaching the gospel. What the eff do I know? For some background information on my own stock picking prowess and why my ideas might be worth considering, I previously wrote super early DD's on Palantir, Telos and C3ai before making money in all 3 of them. I have a large number of people who have sent me thank you messages on reddit for my DD's on those companies.
PLTR - I was in at 10.50 Telos - I was in at 20 C3ai - I was in at 95
As a final qualifying note, in addition to getting incredibly lucky at picking random stocks, I also work in the gaming and digital marketing spaces, and I believe that I am somewhat qualified to comment on the merits of an esports and influencer company such as EGLX.
Who the heck is Enthusiast Gaming?
Enthusiast Gaming is a giant network of websites, esports teams and streaming influencers in the gaming space. Actually, they proclaim to be the single largest esports platform in North America. As of yesterday, they have officially announced that all of their collective followings put them in the top 100 web companies operating in America. Note, the only downside here is that they are getting that number from a huge number of mid sized platforms, not one single super popular site like twitch or youtube. >Source: https://www.enthusiastgaming.com/news/
Actually this is where I think it gets particularly interesting. As a huge gamer and esports believer, I have been looking to find esports investments, but having a real hard time finding pure esports plays. There aren't many companies out there to invest in that are strictly set to capitalize on esports. Frankly, most of the stocks I have found are seemingly doing dick all. I would encourage you to google esports companies. You will mostly find a bunch of garbo sounding companies that are somehow valued at $25m-$50m market cap, but their websites are broken and aren't even up-to-date. Really the only "esports" companies to invest in are the tech majors like Microsoft, Amazon, or Facebook, and the video game companies like Sony, Nintendo, ATVI, EA etc. Sure these are all great companies, but none of them are strictly focused on esports and none of them are new or cheap enough to turn into a ten bagger. *** IF YOU ARE SKIMMING, THIS NEXT ARTICLE IS IMPORTANT**\* Forbes recently released a report on the top 10 most valuable esports companies. Obviously, EGLX is on the list, or I wouldn't be mentioning it. But get this, EGLX is not only the ONLY publicly listed company that forbes identified, but they also have the highest revenue by a long shot. >SORCERY: https://www.forbes.com/sites/christinasettimi/2020/12/05/the-most-valuable-esports-companies-2020/?sh=2e4769ae73d0 EGLX is honestly positioned as the supreme pure esports play in the world right now.
Who the hell is leading this little company?
Well my number one most important metric when assessing a little random undiscovered company is who is captaining the ship? The best way to tell if a small cap stock is a scam or the real deal is to see who is involved. In fact, the biggest reason I chose to invest in the above mentioned companies was because of who was leading them (PLTR = Theil,C3.ai= microsoft ties and the dude from oracle, Telos = a former US general) Good news of course, EGLX has an A+ grade with leadership legitimacy. Adrian Montgomery, the former CEO of the Aquilini Sports and Entertainment (AKA THE VANCOUVER CANUCKS) is running EGLX. These guys are the real deal and they aren't fuckin about in some scam company. If they can run the Canucks, they can run an esports team.
But how do they profit?
EGLX does not own games or huge streaming platforms like twitch. So you may be wondering how they actually make money? INFLUENCER MARKETING. That's how. They are generating money through ad placements and influencer marketing on their huge platform. (And remember, they are in the top 100 US online companies in terms of reach.) Facebook and Google are already soaking up ungodly amounts of money through online advertising and taking over the world. But paid ad placements only go so far. I don't know of a good source off hand, but I am telling you subjectively that influencer marketing is one of the "next big things". Companies are paying people with major social followings to review and talk about their shit. This is a very very big industry. I truly believe influencers are going to overtake hollywood and MSM. You shall see... No sources here. Pure opinion.
Is it actually making money?
Shit loads actually. This year EGLX is talking about increasing their total revenue from $9m last year to $120m this year for like a 1100% annual revenue increase. Obviously, if their proforma numbers turn out to be bogus the stock will collapse. But, referring to the fact that the owners of the Canucks are running this company, I am hoping we are not all being lied to and frauded out of our money. https://www.enthusiastgaming.com/financial-statements/
How do you know I will make the tendies though?
***IF YOU ARE SKIMMING, ALSO READ THIS PART**\* EGLX is currently trading at a $450m CAD or about $300M USD market cap. That is absolute peanuts compared to any other hype stock in the memesphere. With $120m annual revenue, that puts them at about a 3x price to sales ratio, which really isn't that bad at all for even a boring a blue chip. For a growth stock, it is extremely low. But if you dig into their investor presentation, they are actually claiming they will raise their Revenue Per User from $0.40 to $3 in the next 2 years, or a nearly 750% revenue increase, not accounting for growth in the size of their social reach. If you include reach growth, it could be nearly 10 times revenue growth. By that point, the current market cap would be a fraction of their annual sales. This stock is absurdly undervalued if the promises being made by the leadership come true. >Go look: https://www.enthusiastgaming.com/wp-content/uploads/2020/11/EG-Presentation-November-2020-Nov-27.pdf
Final Fun facts:
- They own the best Overwatch team. - They own the Seattle Call of Duty team, which happens to be among the nerdiest cities in America. - They claim to have the best Fortnite players, but idk that game is trash so I couldn't really say if it's true or not. But wait there's more! Saved the best info for last. The stock tripled in the past month. Why? Because EGLX is still only trading on the TSX and they have applied to list on the US stock exchange. They have appointed KPMG as the auditor for the application, and having nice big reputable firm involved certainly increases the odds it will get approved. Furthermore, I actually emailed their investor relations folks and asked when they expect to hit the US markets. Surprisingly, they responded and told me they expect their application to be approved Q1 2021. Once this puppy hits wallstreet, I see it breaking $1B USD in no time, which would be a 3x return. $3B-$5B doesn't seem unreasonable if the current market insanity persists through 2021. We have the opportunity to get in on this company before those darned Americans pump it to the moon. CANADIANS HAVE THE UPPER HAND IN THE STONK MARKET FOR THE FIRST TIME IN OUR DAMN LIVES. TAKE ADVANTAGE OF IT. -- PS: Risks. Risks. I think it's almost certain that these guys will issue more shares to raise some capital. They are kinda acting like the want to pump their own stock with unnecessary positive announcements, and honestly, they are pretty low on cash. Think they only have $9m on hand or something small like that. Too lazy to look it up again. Just watch out for dilution. My bet is that they will do it after listing on the US exchanges and mooning. But honestly I am not too worried in the long run because they need the cash to compete in this space. PSS: More risks. If the us exchange application gets denied it will be bad bad news for my TFSA.
The audio quality throughout the AC series has been progressively getting worse. This post analyses Origins, Odyssey and Valhalla, exposing the fact that heavily compressed low bitrate 24,000 Hz audio is utilized across all three titles. Origins and Odyssey was less noticeable because it mixed higher quality 44,100 Hz ambient environment sounds with low resolution 24,000 Hz combat, character and UI sounds. Valhalla was recently discovered to be the worst offender since it uses 24,000 Hz audio across the board. The aim here is to provide a technical explanation, cross-comparison and to raise awareness of this bad trend. Audio is a fundamental immersive component of any AAA video game, and should be presented with the same level of quality that you would expect within the film and TV industry.
Introduction
This started out as a technical analysis of the in-game audio present in Assassin's Creed Valhalla, but it has since evolved into a topic of a wider scope; if you haven't played the past three AC games, Pandemic notwithstanding, let me be the first to tell you that we are in a predicament. The idea of this thread is to not only educate, but try and prevent a problem before it becomes more of a problem. Since this is a technical subject, there will be references to sample rate, bit rate and codecs, but I feel like it is more common knowledge these days, especially due to the rise of content creators, or anyone who regularly deals with MP3 and video files. Admittedly, there is much to talk about regarding Assassin's Creed, especially if you're of the opinion that the series died after the 2nd/Brotherhood or 3rd game. Set that conversation aside for a moment, grab a squeezy ball, punch a pillow, and let's talk about how Ubisoft are starting to set a horrible trend for in-game audio. So I caved in like many others, gleeing at the prospect of virtually visiting my homeland as an axe-wielding maniac, and decided to pre-order Assassin's Creed Valhalla after thoroughly enjoying my time eliminating the cultists from Odyssey. On launch day during my first playthrough I noticed something that sounded eerily familiar. I game using a pair of Mackie MR624 studio monitors, or if I feel like giving my neighbours a moment's rest, with my Beyerdynamic DT-770 PRO headphones. The audio I was hearing sounded muffled, or in layman's terms, a bit like listening through a pair of tin cans that were accidentally dropped into a cup of earl grey.
Analysis
Enough was enough, I put my investigative cap on and started by first extracting the audio files using Wwise-unpacker, and proceeding to analyse the files using Adobe Audition. I discovered that the SFX are saved at a 24,000 Hz sample rate, with a variable bitrate that peaks at around 70 kbps. Yes, mystery unravelled, it really is that bad. Those of you who do not fully appreciate this technical blunder, might better appreciate it if I put it this way. Visually, it is the equivalent of removing 50% of the colours in a painting, and leaving smears where the details are. Here is a screenshot of my analysis. Looking at the Frequency Analysis tab, you can very clearly observe a frequency rolloff at around 11000 Hz. The low bitrate issue is also not just limited to the PC release. It is affecting all platforms. This is an unusually strict choice of compression considering that the English audio and SFX only take up 4.5 GB of hard disk space. Standard CD audio is at 44,100 Hz (DVD standard is 48,000 Hz), and those are the two sample rates that nearly every streaming service, sound device and operating system are designed to work with. Now, you may have heard people say "Oh, but your ears cannot hear above 20 kHz, so the missing detail is irrelevant". Unfortunately, there is complexity surrounding this issue that the statement fails to address. Firstly, when you take a 24,000 Hz sound, the highest audible frequency will be 12,000 Hz. This is already 8000 Hz lower than what the human ear can detect. When frequencies are missing from the original sound, it also negatively impacts the entire representation of that sound. The more you remove, the more hollow and less defined it becomes. Are you curious to hear the difference?
It has been over ten years since I last sat in an audio theory class, so I'm likely over-simplifying the technical details of this theorem. Any feedback would be greatly appreciated, and in addition, I would highly suggest reading an external official scientific resource. The Nyquist theorem describes this better. Named after a Swedish-born American electronic engineer who worked on the speed of telegraphs in the 1920s, the Nyquist theorem states that a waveform must be sampled twice in order to get a true representation. The sampling frequency must be at least twice the highest signal frequency recorded in order to be effective. Here is a table showing the Sample rate vs. Highest Frequency.
Sample rate
Highest Frequency
22,050 Hz
11,025 Hz
24,000 Hz
12,000 Hz
30,000 Hz
15,000 Hz
44,100 Hz
22,050 Hz
48,000 Hz
24,000 Hz
As a result, if the highest frequency a human can hear is around 20,000 Hz, then 40,000 Hz is the lowest sampling rate you can use to accurately represent any sound that a human can hear. If you are listening to a recording of "bad audio", but to you it sounds acceptable, the issues are probably one of the following:
Bad equipment: headphones, speakers or an improper sound configuration.
The highest frequency of the sound in question was one half of the sample rate used.
Your hearing is damaged or has deteriorated naturally with age. By the time we approach 40 years old, most of us will not able to discern individual tones above 15,000 Hz. If you would like to test your ears, try this Human Hearing Benchmark. As a safety precaution, only perform this test at a medium or low volume.
Even though the highest frequency our ears can detect is around 20,000 Hz, the sound frequencies that exists beyond our hearing range (overtones) greatly colour and impact the sound we hear. Therefore when we record digital audio and cut out those frequencies above 22,050 Hz with a high pass filter (we have to use a filter or else they would cause aliasing or noise in the sample), we are actually changing the original sound that we were trying to record. If you raise the sample rate, the recording will be more accurate. The trade-off is that it takes up more storage. Partly sourced from another post. ScienceDirect overview. This theorem is still used today to digitize analog signals, nearly 100 years after Nyquist was an engineer at Bell Laboratories.
My first question was: is the sacrifice of quality an attempt to try and cram as much in to meet a specific distribution criteria? I've spoken to a few people within the gaming industry personally about this, and the general consensus seems to be: Yes. Please pitch in here if you've had any first hand experience dealing with this. Realistically, it should only affect products within the physical realm, such as trying to compress the game in order to fit it onto a 50 GB (dual-layer) Blu-ray disc. Digital media does not suffer from this limitation, can be downloaded at our convenience and is much cheaper to distribute. If they provided the sound at 44,100 Hz (CD Quality) with an average variable bitrate of 128-192 kbps, as an example, similar to the quality you would expect from streaming a song on Spotify, you would see the total size of the in-game audio increase from its heavily compressed 4.5 GB to approximately 9-12 GB. At a minimum it would be 9 GB since we are doubling the sample rate. Still not very large, but it would be a light and day difference for sound quality. If you're curious to experiment with file size estimations, here's a neat audio filesize calculator.
Is there a solution?
The idealistic solution would be to re-export all sound effects and voice using a sample rate of 44.1 kHz, with the OGG quality parameter set between -q 0.4 and -q 0.6. They could then deliver this as a compulsory patch or a free regional high quality sound pack DLC. Popular games such as Skyrim, Fallout 4, Middle-earth: Shadow of War, Call of Duty: Warzone, Monster Hunter: World and even Ubisoft's own Watch Dogs 2 have all received DLC addons that increase the quality of the game experience.
Final thoughts
Is it acceptable to allow such a fundamental aspect of a game to suffer a significant loss of frequencies in order to meet that distribution criteria? Absolutely not. This sets a neglectful precedent and one that not only severely destroys immersion, but attempts to normalize poor quality sound to the masses. Here's another question for you. If you bought a Blu-ray box set of your favourite show or movie trilogy, would you be satisified knowing that they replaced the lossless DTS-HD 5.1 audio with muddy, tinny, anti-climatic explosions worthy of being peer-traded on KaZaA and Limewire? (I was born in the 80's so please excuse the reference). Consumer expectations within the film and gaming industry aren't that different, VR is evolving and the lines are blurring with every new AAA title. We are starting to expect the same kind of treatment: Detailed facial micro expressions, lip syncing, motion capture, in-game characters based on the likeness of real world actors and actresses, quality voice acting, and dare I say it, high quality sound effects, more commonly referred to as Foley within the film industry. I do not game in one room with a sub-par home media center, and watch films in another where my favourite monolith shaped speakers sit in each corner. If they were sentient and had a mouth and a stomach, I would expect vomit on the floor every time I embark on my journey with Odin. Instead, I have to deal with my audio producer brain punching my cochlea from the inside.
Final, final thoughts
Oddly many of the official reviews of AC:Valhalla I have read so far completely fail to mention the audio issues, and this is concerning. The issues are so obvious that they must have either purposefully omitted the critique, have sub-par sound systems, or couldn't care less. I remember back in the day when video games magazine reviewers took pride in providing a detailed opinion of sound effects and music. Fond memories of reading Zzap!64, Amiga Power and GamesMaster back in the day. How do you guys feel about it? To me, the $60 price tag is a bit of a kick in the teeth, and I feel that Ubisoft should really have audio technicalities down to a T. Is this what we are meant to expect for a title with a AAA budget? Am I crazy for writing or caring this much? Ubisoft could learn a thing or two from the guys and gals responsible for Middle-earth: Shadow of War. They released 4K cinematics for free, along with higher quality in-game assets. We deserve to optionally download HD quality assets for Assassin's Creed, especially since there are many gamers among us that invest a great deal of time and money into our home cinema set-ups. Here is a current thread following this topic on the Ubisoft Player Support Forum: Audio Issues: Bitrate / Dynamics & Balance / Muffled Sounds / Stuttering / Volume etc. | POST HERE If you read this all the way to the end, thank you. Let's hope that the trend of heavily compressed audio dies hard. On a side note, since I've had a few people ask: I'm a music producer and songwriter on the side. Software dev by trade. Gaming, music and audio means everything to me.
Recommended listening and current favourite soundtracks. Links provided where appropriate.
The criminally overlooked Street Fighter EX Plus Alpha Original Soundtrack by Shinji Hosoe, Ayako Saso and Takayuki Aihara. Sakura Mankai is my ringtone.
$SNE, MASSIVE DOUBLE DICK INSIDE. Poised to moon long-term (Computer vision boom, EV boom, autonomous driving tech, gaming boom, music streaming boom, cross-media IP, vertically integrated anime streaming monopoly, online medical services boom, shift to mirrorless cameras)
Listen up retards. Do you happen to feel regret because you always think “ohhh if I yoloed my savings on TSLA/AMD/NVDA 🚀 leaps years ago I could be rich by now!!!” Well if you didn't know already, it doesn’t really matter what happened in the past. Hindsight will always be 20/20. You shouldn’t be harsh on yourself on your past self that your past self wasn’t retarded enough to yolo their savings into AMD/TSLA/.... Your past self doesn’t have the same knowledge that your current self has. It’s fine. If you judged those stocks with the best DD you could do at the time and didn’t think they were worth it, then you did a good job. If you always think about what you could/should have done in the past, then you don't have the right attitude to play the stock market casino imho. The single most important thing is to be able to look ahead. There are always plenty of opportunities around. There are thousands of rockets that are still on earth right now. Some may depart this year, others will stay a little longer on earth. The true strength lies in being able to identify those rockets with the knowledge you have right now. And if you still miss most rockets that will take-off this year that's fine, maybe you'll learn, get better and you'll do better next year. Now, what if I told you there’s a big rocket that’s parked right right here on earth and it has decent chance for take-off this year? Maybe it won't quite reach the moon this year yet, but hey leaving the exosphere should already be a cool milestone. It has rock-solid fundamentals and will see lots of growth in the following years/decade. It’s a company that has the fundamental technology to power all the computer vision tech, which is bound to boom this decade. The company we’re talking about is of course Sony, and it is extremely undervalued right now. Its P/E is only 14. They have a P/S of 1.65, a PEG of 0.92 (< 2 is already somewhat exceptional for a company/conglomerate of Sony’s size, under 1 is a steal) Much lower than all of its same-sector peers. This indicates significant undervaluation. Next up Sony has a P/CF 13.2, ROE of 20% (S&P 500 average is 14% which would already be considered pretty good. 20% ROE is excellent), PEGY of 0.89, P/B of 2.65 and finally Sony has $41.6B in cash on hand. This makes Sony one of the cheapest tech/entertainment/EV/semiconductor growth stocks you will find on the market. (ROE of 20% + PEGY of 0.89 + PEG of 0.92 means this company is a growth stock based on the numbers alone, but we’ll dig into the actual company and overall outlook in a moment) I challenge all retards to find a company with similar benchmarks in one of the mentioned sectors, seriously. Quite frankly doing this DD honestly blew my mind. I kept looking everywhere for reasons why the company could be so undervalued and why they may struggle in the future. Very important to look at all the challenges the company faces to make sure I’m not just doing confirmation bias DD. But all I could find was the opposite. After several weeks and months of working on this DD, I can only conclude that it is overall a very solid company for a bargain price. The new CEO is taking the company in a great direction imho and I'm begin to think he could be Sony's Satya Nadella. So if you want some easy tendies, maybe consider $SNE while it is still cheap, I’d say. For the autists out there who care about analyst ratings, SONY ($SNE) currently has 18 BUY ratings, 2 OVERWEIGHT, 4 HOLD and 0 SELL. (= analyst consensus is a STRONG BUY). Very little analysts cover this stock compared to other entertainment/tech companies, so this adds to my assertion that the stock is very much under the radar. Which means you have time to get in before it gets noticed by the larger investing world and before it starts to get a more fair valuation (P/E of around 30 would be more fair for this company I think, but still cheaper than many same sector peers). But, anyway the few analysts who do happen to cover this company are basically all saying it’s an instant-buy at its current price. Most boomer investors still think big Japanese tech companies are dinosaurs that have long been surpassed by China, South Korea and Apple etc ages ago. Young boomers may think Sony = PlayStation and that it's it. But the truth is that PlayStation, while very important (about 24% of Sony's total revenue last year), is a part of a larger story. Lots of investors in general associate Sony with the passé Japanese electronics companies from the 80’s and the 90’s. Just like a lot people may think BlackBerry is a struggling phone company. While Sony may not be the powerhouse in consumer electronics it was in the 80’s and the 90’s, in a lot of ways they are more relevant than ever before. Despite being a well-known brand and being known as the company behind PlayStation, for some reason its stock still seems to be under the radar among both retail and institutional investors. And boy, are they mind-blowingly undervalued. Even if a big part of its business would collapse tomorrow, they would still be slightly undervalued. And I am about to tell you why. (& btw compared to Japanese tech/entertainment stocks $SNE is still super cheap (Canon, Nikon, Toshiba, Sharp, Panasonic, Square Enix, Capcom, Nintendo, Fujitsu all have P/E ratios ranging from 18 to 77 and none of them have the combination of global clout, fundamentals & growth prospects that Sony has)) 2021 Sony as a corparation is not the fucking Sony from 2005-2015’s, just like BlackBerry in 2021 is not the fucking Blackberry from 2012. Just like Garmin in 2021 is not Garmin from 2011. Just like AMD in 2021 is not AMD from 2012. No, in 2021, Sony is the global leader in imaging technology and people do not fucking realize it. Sony has 50% marketshare in the CMOS image sensor market. There’s a very good chance the smartphone in your pocket has Sony image sensors (unless it’s a Samsung phone). Sony image sensors are powering a big part of today's vision/camera technology. And they will power even more of tomorrow's computer vision tech. In 2021, Sony is a behemoth in video games, music, anime, movies and TV show production. Sony is present in every segment of entertainment. Sony’s entertainment branches have been doing great business over the past 5 years, especially music and PlayStation. Additionally, Sony Pictures has completely turned around. In 2021, Sony is the world’s biggest music publisher (and second biggest music company overall). Music streaming has been a boon for Sony Music and will continue to be. In 2021, Sony is among the biggest mobile gaming companies in the world (yes, you read that right). And it’s mainly thanks to one game (Fate/Grand Order) that nets them over $1B revenue each year. One of the biggest mobile gaming companies + arguably biggest gaming brand in the world (PlayStation). In 2021, Sony is an EV company. They surprised the world when they revealed their “Vision-S” at CES 2020. At the reception was fantastic. It is seriously one of the best looking EV’s. They already sell sensors to Toyota. Sony will most like sell the Vision-S's tech to other car manufacturers (sensors for driving assistence / autonomous driving, LiDAR tech, infotainment system). 40 sensors in the Sony Vision-S Considering the overwhelmingly good reception of the Vision-S so far, I suspect the Vision-S could be another catalyst that will put Sony as a company on the radar of investors and consumers. We've seen insane investment hype for anything even remotely related to EV over the past year. We've seen a company that barely had a few EV design concepts (oh wait, they had a gravity-powered truck though) even get a $30B market cap at some point lmao. But somehow a profitable company ($SNE) that has an EV that you can actually drive, doesn't even have a fair valuation? In 2020’s Sony’s brand value is at their highest point since 12 years. In 2021, it is projected to be a its highest point since 2001 assuming same growth as average yearly growth from 2015 to 2020. Keep in mind brand valuation is a bit bullshitty as there’s no standardization to compare brands from different sectors, let alone non-consumer-facing brands with consumer-facing brands. But one thing we can note is that Sony both as B2C brand and as a B2B company is on a big upwards trend. https://interbrand.com/best-global-brands/sony/ https://careers.uw.edu/blog/2020/03/17/these-are-the-10-biggest-video-game-companies-in-north-america-shared-article-from-zippia/ In 2021, Sony is an entertainment behemoth. They have grown their entertainment branches by a huge amount over the past 5 to 10 years (they made some big acquisitions in the music space especially and they’re now also all-in in anime). I don’t think people realize how big Sony is as an entertainment company. I dug up the numbers and as of Q3 2020, PlayStation is the second biggest video game company in the world (Tencent is #1) in revenue (I suspect Sony might dethrone Tencent after Sony’s FY Q3 2020 is released). But Sony already comes very close to Tencent especially if you add Fate/Grand Order (which is under Sony Music and not under PlayStation) under PlayStation. There’s no single other company that has this unique combination of a dominant/important position in all entertainment segments. (video games + music + movies + TV series + anime + TV networks). I guess Tencent maybe? In 2021, Sony has amazing momentum in the camera space. If you’re familiar with the enthusiast photography space, you should know this. Basically, the market is slowly shifting from SLR to mirrorless cameras. This is because mirrorless cameras tend to smallelighter, have faster AF, better low light performance, better battery life and better video performance. Sony is the company that has been specializing in the development for mirrorless cameras for over a decade while Canon’s bread and butter has always been SLR cameras. Sony is in the lead when it comes to mirrorless cameras and that’s where the market is shifting towards. Because the advantages of mirrorless have become more and more apparent and Sony’s cameras have become technically superior, Sony has gained quite a bit of market share over Canon and Nikon in the last few years. In 2019, Sony overtook Nikon as the #2 camera manufacturer. Sony is in an upwards trend here. (they have the ambition to become the world’s #1 camera brand) Sony also has very good marketing for their cameras. (Sony has a lot of YouTubers / influencers / brand ambassadors for their cameras despite being a smaller brand than Canon) (just search on YouTube and/or Google “switching to Sony from Canon” just to give you an idea that they do have amazing brand momentum in the camera space. You won’t get as many hits for the opposite) A huge portion of Sony’s profit comes from image sensors in addition to music and video games. This is in addition to their highly profitable financial holdings division & their more moderately profitable electronics division. Sony’s electronics division, unlike other Japanese brands, has shown great resilience against the very strong competition from China & South Korea. They have been able to maintain their position in the audio space and as of 2020 are still the global market leader in high-end TV’s (a position they have been holding for decades) and it seems they will continue to be able to maintain that. But seriously this company is dirt-cheap compared to any of its peers in any segment and there’s various huge growth prospects for Sony:
CMOS image sensors & Sony’s overall imaging prowess will boom due to increased demand from automotive sector, security & surveillance industry, manufacturing industry, medical sector and finally from the aerospace & defence industry. On the longer term, image sensors will continue to boom due to increased demand for computer vision & AI + robotics. And for consumer electronics demand will remain very high obviously.
Sony is aiming for 60% market share in the CMOS image sensor market by 2026. Biggest threat here is Samsung here who have recently started to aggressively invest in image sensors and are challenging Sony. Sony has technological lead + higher production capacity (and Sony will soon open a new plant in Nagasaki), so Sony should be able to hold off Samsung.
The iPhone 12 Pro has 3 cameras + a lidar sensor. Apple now buys 3 image sensors (from Sony) + LiDAR sensor (from Sony) per iPhone 12 Pro they manufacture. Remember the iPhone X and iPhone XS? That one had “only” 2 rear cameras (with image sensos from Sony of course). Basically, Sony will be selling exponentially more image sensors as more smartphones get equipped with more and more cameras.
Now think about how many image sensors Sony can sell to Apple if the iPhone 13 will have 5 cameras + LiDAR sensor (I mean the number of cameras on smartphones certainly won’t decrease)
Gaming (PS5 hype, PSN game sales are booming, add-on content is booming, PS+ subscribers count is booming and finally PSNow & first-party games sales are trending upwards as well). Very consistent year-on-year profit & revenue growth here. They have a history of beating earnings expectations here. The number of PS+ subscribers went from 4M to 48M in just 6-7 years. Investors love to hype up recurring revenue and subscription services such as Disney+ and Netflix. Let’s apply the same logic to PS+? PS+ already has more subscribers than HBO Max in the USA.
PlayStation (video games in general) has not even scratched the fucking surface. Most people who play video games now are millennials and kids. Do you think those millennials will stop playing video games when they grow older? No, of course not. Boomers today also still watch movies and TV. Those millennials have kids and those kids are now also playing video games. The kids of those kids will also play video games etc. Basically the total addressable audience for video games will by HUGE by the end of the decade (and the decades after that) because video games will have penetrated all age ranges of the population. Gaming is the fastest growing segment of the whole entertainment business. By a large margin. PlayStation is obviously in a great position here as you can guess from the PS5 hype, but more importantly imho, the growth of PS+ subscribers (currently a bit under 50 million) and PSN users (>100 million MAU) over the past 5 years shows that PlayStation is primed to profit from the audience growth.
On top of that you have huge video game growth in the China where Sony & PlayStation is already much better established than Xbox (but still super small compared to mobile games and PC gaming in China). Within the console market, Xbox only competes with PlayStation in North America. In the rest of the world, PlayStation has an enormous lead over Xbox. Xbox is simply a lesser known and lesser desirable brand in the rest of the world
Anime streaming (basically they have a monopoly already + vertical integration, it might still be somewhat niche right now, but it will be big within 5 years. Acquiring Crunchyroll was a very good move)
Music streaming (no, they don’t have a music streaming service, but as music streaming grows, Sony Music also gets a piece of the growing pie through licensing/royalties, and they also still have a little 2.8% stake in Spotify)
Apple, Amazon, Netflix, AT&T and Disney are currently battling it out in the streaming wars. When there’s a war you have little chances of winning, you shouldn’t be the one waging the war. You should be the one selling the ammo. Basically Sony Pictures (tv shows + movies) is in that position. Sony Pictures can negotiate good prices for their content because Apple, Amazon, Netflix, AT&T are thirsty for content and they all want their own exclusive content. Sony Pictures does not need to prop up their own streaming service just like Sony Music doesn’t need their own music streaming service when they can just license out their content and turn a profit. There will always be demand for TV & movies content, so Sony Pictures is well positioned is as an independent content provider. And while Apple, Amazon, Netflix, AT&T and Disney are battling it out on the forefront, Sony is quietly building their anime empire in the background. Genius business move from Sony here, seriously. They now have anime production & distribution.
Netflix has 200M subscribers and they currently have a 250M market cap. Think about what Sony will have in 5 years? >30M Crunchyroll subscribers (assuming all anime will be consolidated into Crunhyroll) & >100M PS+ & PSNow subscribers? Anime and gaming is growing faster than movies and TV shows. (9% CAGR for anime, 12% CAGR for gaming vs. 5% CAGR for the whole movies & TV show entertainment segment which includes PVOD, SVOD, box office, TV etc etc). And gaming as a whole is MUCH bigger than SVOD streaming. Netflix gets 99% of their revenue & profit through subscriptions. For the whole Sony Group Corporation, their subscription services (games + anime) it’s currently only 4.5% of their total revenue. And somehow Sony currently has a meagre $128B market cap?
PlayStation alone is bigger than Netflix in terms of operating profit. PlayStation has a MUCH higher profit margin than Netflix. For Q3 2020 Netflix posted $790M operating profit and PlayStation posted $988M operating profit. Revenue was was $6.44B for Netflix vs. $4.77B for PlayStation. (and btw Sony’s mobile gaming revenue (~$1B / year) is under Sony Music, it is not even in those PlayStation numbers!!!)
Think about it. PlayStation alone posts bigger operating profit than Netflix (yes revenue is bit smaller, but it’s the operating profit that matters most). And gaming is growing faster than movies. And PlayStation is about 24% of Sony’s total revenue. And yet Netflix has a market cap that is equal to the double of Sony's market cap? Basically If you apply Netflix’ valuation to PlayStation then PlayStation alone should have a bigger market cap than Netflix' market cap.
Sony Vision-S & autonomous driving tech (selling sensors + infotainment system to other car manufacturers). Sony surprised everyone when they revealed their Sony Vision-S electric vehicle last year at CES 2020 (in-house design and made in cooperation with Magna Steyr). And it’s currently being tested on public roads. Over the past year we have seen absurdly big investment hype into anything even remotely related to EV’s (including a few questionable companies). We’ve even seen an EV company with a gravity-powered truck get a $30B market cap in June last year. Meanwhile Sony, out of nowhere, revealed what is arguably (subjectively) one of the best looking EV’s. It got very positive reception at CES 2020. An EV that you can actually drive. But somehow their stock is still dirt-cheap based on their current fundamentals alone? Yet some companies that had pretty much nothing but some EV design concepts got insane valuations purely due to hype?
LTE chips for IoT & Industry 4.0 (Altair Semiconductors)
Cross-media IP (The Last of Us show on HBO, Uncharted movie etc). Huge unrealized potential synergy here (it’s about to change). We have seen that it can turn out super well when you look at The Witcher, Sonic the Hedgehog and Detective Pikachu. When The Witcher released on Netflix, sales of The Witcher 3 significantly increased again. Imagine the same thing, but with Sony IP’s. Sony Pictures is currently working on 7 video game IP based TV shows and 3 movies. We know The Last of Us tv series is currently in production for HBO. And then the Uncharted is currently in post-production and scheduled to be released in July this year currently. If Uncharted turns out to be successful, it will mark a big, new milestone for Sony as an entertainment company imho.
Aniplex (Sony Music Entertainment Japan subsidiary for anime production, distribution & mobile games) had a fantastic year in 2020. (more on this later) There is a lot of room for mobile games growth with Aniplex. Thanks to Aniplex, Sony might beat their earnings forecast.
Drones. DJI just got put on Entity List in USA and Sony started developing drones for prosumer / professional a few years ago. Big opportunity for Sony here to take a bit from DJI’s dominance. It only makes sense for Sony to enter the drone market targeting the professional & prosumer video market, considering Sony’s established position in the professional audio/video/photography space
Currently Sony also has several ventures & investments in AI & robotics
Over the past decade, Sony has also carefully expanded into medical equipment tech & biotechnology. Worth noting that Sony also has an important 33% stake in M3 inc (a medical services through-the-internet company with a market cap of $65.5B) (= just their stake in M3 Inc is worth $22B alone, remember Sony, with their large, diversified revenue streams & assets only has a market cap of $128B?)
Sony Pictures has a great upcoming movie slate (MCU Spider-Man, Uncharted, Ghostbusters: Afterlife, Venom 2, Morbius, Spider-Verse sequel, Hotel Transylvania 4, Peter Rabbit 2, Vivo, The Nightingale). They will profit from the theatre reopening and covid recovery. They may even become more favourable among movie theatre chains because they won’t release their movies on the same day on streaming services like Warner (and yeah movie theatres are here to stay, at least for a while imho)
All the above comes on top of established, mature markets (Financial Holdings & Electronic Products)
Oh yeah, btw though TV’s are a cyclical and mature market and are not that important for Sony Group Corporation’s bottomline*, Sony TV’s will continue to do well for the following successive years: o 2020: continued pandemic boost
2020-2021: PS5 / Xbox Series X/S
2021 Summer Olympics (tv sales ALWAYS spike during the olympics) (& the effect is more pronounced for high-end TV’s, = good for Sony because Sony’s market share is concentrated in the high-end range (they are market leader in the high-end range)
2022 FIFA world cup (exact same thing as for the olympics)
You could say it’s already priced in, but the stock is already ridiculously undervalued so idk…
You would think this company somehow has a bad outlook, but that could not be further from the true, let me explain and go over some of the different divisions and explain why they will moon: Sony Entertainment While Netflix, Disney, AT&T, Amazon, and Apple are waging the great streaming war, Sony has been quietly building its anime streaming empire over the past years.
Sony recently acquired Crunchyroll for $1.175B (it is a great deal for Sony imho and will immediately be more valuable under Sony. Considering the growing appetite for anime I honestly do not even understand why AT&T sold it, they could have integrated it with their other streaming service (HBO Max) but ok)
With Crunchyroll Sony now has the following anime empire:
Aniplex (anime production & distribution, subsidiary of Sony Music Entertainment Japan) F
Funimation
Manga Entertainment UK (production, licensing, and distribution, UK)
Wakanam (licensing and distribution in Europe)
AnimeLab (licensing and distribution in Australia & New Zealand)
Crunchyroll (3 million paying subcribers, 90 million registered users and 50 million social media followers)
* Why anime matters: Anime growth “The global size is expected to reach USD 36.26 billion by 2025, registering a CAGR of 8.8% over the forecast period, according to a study conducted by Grand View Research, Inc. Growing popularity and sales of Japanese anime content across the globe apart from Japan is driving the growth” (tl;dr anime 🚀🚀🚀🚀🚀, Sony is all in on anime and they have pretty much no competition) Anime is the fastest growing subsegment of movies/video entertainment worldwide.
Sony also has a partnership with Bilibili for anime distribution in China:
Bilibili already partnered with Sony Music Entertainment Japan to bring Aniplex’s hugely successful Aniplex’s Fate/Grand Order mobile game in China.
Sony acquired a 5% stake in Bilibili for $400M in March 2020 (that 5% stake is now already worth $2.33B at Bilibili’s current share price ($BILI) and imho $BILI still has lots of upside potential considering it is the de facto video creation/sharing/viewing à la YouTube/Twitch for GenZ in China)
Sony Music (mobile games) generated $400M revenue from its mobile games in Q2 FY2020, published through Aniplex (Sony Music Entertainment Japan, “SMEJ”) subsidiary
They are the publisher of Fate/Grand Order, one of the most profitable mobile video games of the past 5 years (has generated $4B in revenue (!!) by the end of 2019 and is still as popular as ever). Fate/Grand order is the 7th most profitable mobile game in revenue worldwide as of 2020 (!)
Aniplex launched Disney: Twisted Wonderland in March this year. In Q3, it was the #10 most downloaded mobile game in Japan. (Aniplex now has two top ten games in Japan)
Fate/Grand Order was the #2 most tweeted game in 2020 and #3 was Disney: Twisted Wonderland. You can see that Aniplex has two hugely successful mobile games. (we are talking close to $1B of revenue a year here). It is the #2 game in Japan by total revenue from Q1 2016 to Q3 2020 and the #9 game in worldwide revenue from Q1 2020 to Q3 2020.
SMEJ earns about > $1B from mobile games in revenue from mobile games and there is still a lot of future growth potential here considering Japan’s mobile game market grew a whopping 32% yoy from Q3 2019 to Q3 2020.
Aniplex recently co-distrubuted the movie Demon Slayer: Mugen Train in Japan in October 2020. It became the highest grossing film of all time in Japan with a total gross box office revenue of $380M. In the middle of a pandemic. It still needs to release in South Korea, China and USA where it will most likely do great as well.
Sony Interactive Entertainment (SIE) (Game & Netwerk Services business unit):
We all know 2020 was a huge year for video games with the stay-at-home pandemic boost. The whole video game sector brought in $180B of revenue in 2020, a whopping 20% increase yoy.
But 2020 will not be just a one-off temporary exceptional year for video games. The video game market has a CAGR of 13% which means it will be worth $291B in 2027. Video games is by far the segment with the highest growth rate in the whole entertainment industry.
PlayStation obviously has a huge piece of this pie and over the past years has seen consistent yoy revenue and profit growth. Think about it, for every FIFA/Call of Duty/Assassin’s Creed sold on PS4/PS5, Sony gets a 30% cut. There have been sold a billion PS4 games so far.
5 years ago 20 to 30% of PS4 games were purchased digitally. Flashforward to 2020 and it’s 60-75% and the digital ratio looks set to still increase a bit. This means higher profit margin for game publishers and for Sony at the expense of retailers
SIE has seen huge success in its first-party games over the past 5 years. Spider-Man, God of War, Horizon: Zero Dawn, The Last of Us Part 2, Uncharted 4, Ghost of Tsushima, Days Gone, Ratchet & Clank have all been huge successes. This is really big and represents a big change compared to the previous generations where Sony never really hit it big as a games publisher even though most of their games were considered quality games.
SIE is now not only a powerful platform holdeprovider, but also a very successful games publisher with popular IP’s (Uncharted, God of War, The Last of Us, Horizon, Ghost of Tsushima, Ratchet & Clank). This is an enormous asset, because firstly it increases the chances of success for cross-media opportunities (Sony Pictures can make TV shows and movies out of it to expand the popularity of those IP’s even more). And secondly, it is an obvious selling point for PS5. The more popular and bigger their exclusive content, the more they can draw people to their platform/service. This should increases PS5 total marketshare over its competitor.
The hype for God of War: Ragnarok will be absolutely through the roof. Hype for Horizon: Forbidden West is also very good already (10 million yt views, 273K likes which is very good). Gran Turismo 7 and Ratchet & Clank will also do very well in 2021. (I suspect that GoW oand Horizon might be delayed to 2022)
PS5 reception has been extremely good. Demand is through the roof as well all know. The only problem is that they cannot quite capitalize on the demand due to lack of supply, but overall, it is a very good thing that demand is very high, and that reception has been very positive. The challenge will primarily supply and production-related for the following 6 months and to be able to maintain brand momentum. Hopefully, they won’t push disappointed/inpatient customers to competitors.
Considering there’s backwards compatibility from PS4 to PS5, users will want all their PSN content to transition with them as well, so I expect them to lose very little marketshare to Xbox. Also, I do not know if Americans realize it, but Xbox is not nearly as big as PlayStation in the rest of the world as it is in the USA. PlayStation just has global brand power that Xbox just doesn’t have, so Xbox isn’t much of threat at all I’d say. Where I live, in Belgium, In Europe everyone is talking about the PS5, nobody really seems to care about Xbox Series S/X that much. Comparing PlayStation to Xbox in terms of mindshare is like comparing Apple to Motorola (not meant to be a diss to Motorola, I have a Motorola phone myself, just saying that Xbox has significantly less mindshare / brand power in Europe).
SIE is likely working on PSVR 2, this could be big.
Sony has a small stake in Epic Games (1.4%) and they have a good business relationship with them, so this might also make them open to release first-party games on Epic Games Store after exclusivity period on PS5.
Remember the Travis Scott concert in Fortnite? I believe that was one of the reasons why Sony invested in Epic Games. It serves as an example how music can sometimes converge with video games, and this can play to Sony’s strengths.
PlayStation also has way superior presence in Asia compared to Xbox. Have been expanding into China as well. Another great opportunity for revenue growth.
PS+ subscribers grew from 5.7 million by the end of 2013 to 46 million by October 30th, 2020. This is an average growth rate of 28% over the past 5 years. Considering most of the growth was early on, it will slow down, but I predict that they will have about 70 million PS+ subscribers by the end of 2023. This is huge and represents a stable, recurring source of income. Investors who keep hyping Netflix/Disney+ will love this, but it seems they have yet to discover $SNE.
There is a reason why Amazon, Google, Nvidia have been aggressively investing in video games & games streaming. They know the business is huge and is about to get even bigger. But considering the established, loyal PlayStation userbase, the established global brand of PlayStation and the exclusive games, PlayStation should be able to easily standoff competition from Amazon, Google and Nvidia (GeForce Now) in the next few years. So far, Amazon’s venture into game development, publishing & streaming has completely failed. Stadia and GeForceNow seem to have a bit more success, but still relatively niche. Therefore, I think PlayStation is well-positioned to remain one of the leaders in the industry for the following decade.
I'll get to the other divisions later, I figured this is a good first step. But so far the tl;dr Image sensors: 🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀 IoT/Industry 4.0 chipsets: 🚀🚀🚀🚀🚀🚀🚀 PS5/PSN/PS+: 🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀 Online medical services (M3 inc.): 🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀 Anime: 🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀 Fate/Grand Order: 🚀🚀🚀🚀🚀 Demon Slayer: Mugen Train 🚀🚀🚀🚀🚀 Sony Music / music streaming (the performance of Sony Music’s in Sony’s business is seriously understated. The numbers speak for themselves): 🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀 Sony Electronics 🚀 Sony Financial Holdings (very stable & profitable business, even managed to grow slightly during pandemic when most insurance companies performed more poorly): 🚀🚀🚀 Still have to cover Sony Pictures, but their upcoming movie slate looks pretty good honestly (Spider-Man sequel, Venom: Let There Be Darkness, Ghostbusters: Afterlife, Uncharted, Morbius, Hotel Transylvania 4 so that's worth one rocket as well imho 🚀 tl;dr of tl;dr: 🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀 Disclaimer: I am not a financial advisor. I am an idiot that's trying to understand why $SNE stock is so cheap. Positions: SNE 105C 21st January 22
Not much information about this company, so I started writing my own research on the company. Here is the investor presentation: https://nexters.com/images/inv_info/Nexters_Investor_Presentation.pdf If want to understand the valuation of the company, the risk/reward, and the potential I need to answer the following questions:
What is Nexters Global?
SPAC is a safe bet?
Comparison with its competitors?
$1.9B is cheap or expensive?
Let's begin!
1. What is Nexters Global?
Nexters Global is a fast-growing mobile game development company with $450 million gross revenue* (2020), 85 million total game installs, 5.4 Million monthly active users, with 10x growth of revenue in the last 2 years. Already profitable with $110 million net profit in 2020. The management has more than 10 years of experience in creating games. Located in Cyprus (Europe) with roots in Russia (a very strong IT region). They are well known for being in Game Development since early 2005 in the epicenter of the web, social and mobile game development. https://preview.redd.it/juhbhhuwhmg61.png?width=640&format=png&auto=webp&s=529a0e927aa3bc3205430d97204d3d625f36fc8d Since the launch, the company has proven that it can develop, publish and use marketing to scale its games. With 37% of its revenue coming from the US/Canada, 23% from Europe, 19% from Asia it is already an international company. \In the investor presentation Nexters Global states 310 million net revenue, as at the* sec.govreports it is more common (example) to use thegross revenuefor gaming companies as their base metrics. That's why here and below I’m usinggross revenue. Please see the spreadsheet below with a comparison to other companies. Further plans are: https://preview.redd.it/t9kdphd0img61.png?width=994&format=png&auto=webp&s=b70e92455e253033e99a91b17b0a1f85012e1e5b
To increase the revenue of existing games (basically, double the revenue in 3 years).
Launch new titles in 2021: 3 new games announced
Working on the sequel of their best selling game "Hero Wars 2".
Use cash to acquire other game developers with great games to amplify revenues using their expertise and marketing/production capabilities to make global hits.
2. SPAC is a safe bet?
There are so many SPACs, that we should be very selective on what we choose to buy. To do that we need to check if the business is real. There are different kind of risky SPAC’s on the market:
Without product
Without revenue
Without an addressable market
Without proof that they can scale
We need to verify that Nexters Global is not on that list. Let’s have a look at the company: The product? Web, Social, Mobile Games. To check if their numbers are real simply open the game page in App Store and Google Play store. Android Apps by NEXTERS GLOBAL LTD on Google Play Nexters Global LTD Apps on the App Store The top game has more than 50,000,000 installs with more than a million positive reviews and an average rating of 4.6. With other games/stores combined, it correlates with the company's stated 85 million installs. https://preview.redd.it/jwh51gm2img61.png?width=735&format=png&auto=webp&s=428ec2dc85a4a6c1d51c67aa8fa1f7876edd3dab I like that I can see the numbers myself, and also can "touch" the product and how it works. it increases my confidence in owning the stock. Actually, I have been playing their top-grossing game Hero Wars for several months last year. And I loved it... loved it so much that I’ve spent around ~1000 dollars within 3 months. And I’ve seen players that spent much much more than me (higher ranked, had much more power and ranks). And there were so many players that they had to add new servers each week, or even daily. The first impression is that I really like the product. I see how it works. The revenue. It's huge. In the SPAC world, there are companies that can’t make revenue but predict that their revenue will go up 10-20-50x times in 3-5 years. Usually, such companies are SCAM as they mislead investors with revenue that will never happen. On another side, Nexters Global has already $450 million in revenue with a $110M profit. And the growth rate is +177% YoY. And even the slowdown in growth means the actual increase in revenue substantially, just by the magic of the compound growth. I like the numbers very much here. The addressable market How big is the addressable market? The World’s 2.7 Billion Gamers Spent$175 Billion on Games in 2020; The Market Will Surpass $200 Billion by 2023. So Nexters Global is well-positioned in expanding market. https://preview.redd.it/tf41au04img61.png?width=888&format=png&auto=webp&s=7547a1d3c2c8da43554a655d9b32bb4aaf4f2d97 Revenue geography shows that it is also diversified well. The company has proven that it can generate revenue all around the world, not just in its local market. That is very important in order to calculate the valuation of the company. https://preview.redd.it/sxq08qg5img61.png?width=362&format=png&auto=webp&s=ed9b771d632268efb31d96d57c831d61d8caf12f But how long Nexters can generate revenue? Unlike the traditional PC gaming, where the peak of sales occurs after the launch of the game and then shrinks a lot, in the online mobile game market - games get updates each month/quarter to engage customers and make them stay in the game longer. Games with great engagement + marketing resources can stay on top charts for many years. You just reinvest part of your revenue into marketing to earn even more. It works for games with high revenue per player (ARPPU). Nexters Presentation: $106 - Average net bookings per paying user(2) (Q4’20) https://preview.redd.it/jsqcmby6img61.png?width=666&format=png&auto=webp&s=f96f6ef490ee2b16cf6ca01e8508df578bfdd302 Percentage of paying users increases. Average net booking increases. With the 6% of paying users and $106 net payment - it is quite easy to calculate that you earn $6.36 from any user that downloads the app, so you can spend on advertisement a lot of money and you will earn even more. When you have 277% revenue growth in 2019, 177% in 2020 it won’t just stop growing. Next year double-digit growth of revenue is highly probable. From a statistical behavior the growth slowdown to zero is very unlikely. If we take examples of other super-hit games from Supercell (Clash of Clans) and Playrix (Gardenscapes). Example: Playrix did continue to grow since 2016 explosive revenue withadding +41% YoY growth in 2018 +35% in 2019. https://preview.redd.it/so9ijp08img61.png?width=667&format=png&auto=webp&s=6f6acbdf41374f89c045bb07c4b4e5f7dc235bf9 Another example: Supercell's revenue continued to grow at least 2 years after the revenue explosion before slowing down. https://preview.redd.it/tjjuf159img61.png?width=855&format=png&auto=webp&s=01116616d83bbeeb34bbe98da012d22c3964f5d5 The growth Great games could continue to grow. Nexters Global estimates their net revenue to reach $562 million dollars. That equals to ~$802 million gross revenue in 2023. And the company is valued at just 1.9B now. Re-think that.📷 This chart also shows that they project only +10.5% YoY growth in revenue in its current games after this year's gain. Which I think is too conservative considering the examples above. I understand that they’ve chosen the strategy not to mislead investors and should stay conservative, but I think they will easily beat their own estimates and 20-25% growth is much more realistic. The good thing is that we can track their performance in terms of downloads and revenue in stores. We can stay ahead and know the data earlier than official numbers come out, which brings another level of transparency for investors.
Kismet Acquisition One Corp company
The company is led by CEO and Director Ivan Tavrin, the founder and Principal of investment firm Kismet Capital Group. Tavrin previously served as the CEO of PJSC MegaFon, Russia's second largest telecommunications operator, and before that, he founded UTH Russia, one of the largest independent media broadcasting groups in Russia. Kismet Acquisition Two plans to target the internet and technology sectors operating in Europe, including Russia, as well as businesses established by founders with Russian origins. Credit Suisse, BofA Securities and LionTree Advisors served as financial and capital markets advisors to Kismet Acquisition One Corp. Advisors look good to me. The CEO's background and experience too. Additionally, he was one of the shareholders in the recently launched Russian IPO "OZON" marketplace. Which is now +120% up. The only thing that sounds scary here is the word “Russia” everywhere. Is there an unwanted geopolitical risk? From the legal point of view, every entity is registered under British Law jurisdictions (Cyprus, BVI). So, basically, there shouldn't be any problems. Well... they would better be in the US as many investors don’t like foreign companies. But there are great examples of super successful Supercell and Rovio that were NON-US too. And we know that the Russian Tech-sector is high qualified (Google Founder - Sergey Brin, Pavel Durov - Telegram, Vitalik Buterin - Etherium, and even Russian Hackers is a “meme”). And as I said before their business looks crystal clear, anybody can check their metrics so they can’t fraud the data, unlike, for example, Luckin Coffee did in China. Therefore, this kind of risk is eliminated.
3. Comparison with its competitors?
Let's talk about numbers. I’ve tried to compare the game developer to its direct competitors. I've selected only companies with major mobile game-driven revenue. Here is the full spreadsheet access: Nexters Global Comparison I’ve marked the concerning metric with yellow and red, Good metric with green, Superb one with dark-green color. https://preview.redd.it/tmsosbtaimg61.png?width=1079&format=png&auto=webp&s=2b50cd7a1a54115bb496849c43b3611094fc6309 Please take time to read the numbers and come back after. Update!With the latest news that Electronic Arts buys GLU Mobile with +39% premium from the market - the sector is officially undervalued. Thoughts on Nexters Global
Nexters is big enough in terms of revenue
The MAU (Monthly Average Users) is not very big. While you can consider that as a “minus” that's actually the sign of a young company, with the opportunity to attract more users “cheaper” (with high efficiency). When you already big and you have hundreds of million players, you have to spend more and more money on user acquisition.
No diversification. That’s a red flag. Hearing of 3 titles coming next year + Hero Wars 2 to be developed. And the idea of acquisition of small developers with excellent games to amplify their revenue 10-100 times promoting it around the World is the Next goal for Nexters. This will bring diversification.
Remember that Supercell (also a European company, HQ in Finland) with its only best selling game was sold to Tencent at a $10.5 billion valuation. This "Hero Wars" game is currently following its path (in terms of growth numbers & revenue).
Games are high gross margin projects. I assume this gross margin from the cost of revenue is: AppStore/Google Play 30% commission + spending on maintaining the Servers. That brings me to the industry average of 65%
Marketing spending numbers are rational (20-40% zone), in order to stay profitable and to maintain modest growth.
It's already a large scalable company. No “company growth issues” seen through this data. Sign of good management here.
Unusually high net income seeing here. Assumption: Research & Development costs /Administrative spending / Sales and Marketing is much lower compared to other US companies. Probably they benefit from HQ being outside of the US. That should affect the company multiplicators (P/E) positive.
With not very high US Market penetration - the opportunity still there.
Game reviews/rating is essential in mobile games: The higher-rated games = the cheaper is the cost of user acquisition. The longer players stay in-game. The “4.5” rating tells me that customers of this company are very satisfied.
Fascinating growth. Very young company. The slowdown in growth is expected but compound growth is still very probable.
Estimated Compound Annual Growth (CAGR) is 25%. Which would bring the company ~$802 million revenue in 2023.
Is the company valued right? It's more profitable in comparison to its competitors, its double-triple digit growth company with all signs of the trend to continue.
The company is honest with its estimates and setting very realistic numbers. Other SPACs prefer to predict 10,20,50x revenue in the future even without proving they can scale. This company is doubling-tripling every year and shows estimates of 25% annual growth each year.
I ended up with numbers: P/S = 4.19, P/E = 17.27. This valuation seems just right with current earnings and the sector, but not with the future growth. As there is a Hot trend in gaming and with outstanding YoY growth could be worth much much more.
4. $1.9B is cheap or expensive?
The current price of $KSMT (“GDEV”) is $10.15 which represents a $1.9B valuation. Before the deal is completed the price cannot be valued less than $10 due to SPAC rules. So there is simply no downside risk at this point.. But can it go up? What is fair valuation? Is there a risk of a selloff from shareholders? How rich the valuation can be in terms of P/E (Price to Sales ratio)? First, let's find out the risk of insider selling: Here is the sec report: https://www.sec.gov/Archives/edgadata/1814824/000121390021005589/ea134294ex99-1_kismet.htm The Transaction is expected to deliver up to $150 million in cash to the Company’s balance sheet before advisor fees and/or redemptions by Kismet Acquisition One Corp. current shareholders, with proceeds expected to be used for general working capital purposes and potential acquisitions. Existing shareholders of Nexters will receive a cash payment of up to $150 million pro-rata to their pre-money shareholdings, and will roll approximately 92% of their holdings into the combined company while agreeing to a 12 month lock-up (subject to certain exceptions). In addition, the founders and the management will receive 20.0 million Earn-Out shares over 3 years (with 50% of the Earn-Out released at $13.50 VWAP and 50% released at $17.00 VWAP), also subject to a 12 month lock-up. The Transaction will be funded by approximately $250 million held in trust by Kismet Acquisition One Corp., subject to any redemptions, as well as the additional $50 million investment by the SPAC Sponsor, Kismet Capital Group, via an affiliate. The investors will have a 12-month lock-up on selling + they get benefits on reaching the valuation 35% and 70% higher from the current price. This means that there will be no insider selling in the near term, which is very positive signal. Acquisitions Nexters Global plans to use proceeds in M&A (buying small game development studios with great projects that just don’t have enough cash, expertise, or right developer team) to benefit from its situation in order to launch great games worldwide. https://preview.redd.it/xhypgzqfimg61.png?width=1000&format=png&auto=webp&s=642c03fecbb851984527c46774beb0ecc44eba0a It is a common mistake to assume that great games can be run by small studios or individuals, as in 2020 you need at least a couple of million dollars spent on marketing to understand if the project is worth it, or not. Small developers can’t afford it. On the other side, Nexters can benefit from it really well. If they are successful in that, we could see 10+ new titles in the future. That could diversify its game portfolio, making this company a safe bet for Hedge funds and other market players, driving future growth. “Hero Wars 2” game announcement. Hero Wars is the top-grossing game, which generates most of the revenue. With “Hero Wars 2” announcement the company can benefit a lot.. Usually, game sequels can do very well, as they are easier to promote, finding their “fan base” from the beginning. This could create a new source of income, work as a diversification, launch the new cycle of the revenue stream for many years ahead. Partnership with Playrix founders Here is another thing that I want to focus on: Bukhman brothers acquired a 43% stake in Nexters in 2018 They are founders of “Playrix” - a private mobile game developer company, currently valued at $7B(valued in Q1 2020). Now more likely ~11B as their revenue increased 1.5 times during 2020. Please read these articles in Bloomberg and Forbes first:
Summary from the articles: Cashing out (selling out to Tencent or Activision Blizzard) is not interesting right now. We are growing every year. Game industry multiplicators of public companies were priced wrong . This year has changed it. And this trend will continue as top games can grow for many many years, reengaging users with updates. Playrix is not interested in IPO's at this valuation. They want to wait until the market changes and start pricing gaming companies at different valuations, not the 4-5 year revenues, but maybe more like Tech companies are valued now (P/S 20-30 instead of 4-5)? I can assume that Playrix founders are interested in the long-term success of Nexters Global SPAC-merger in order to change how markets price the gaming companies as they want to bring Playrix to an IPO in the future. They want to wait until the market starts pricing gaming companies at different valuations, not the 4-5 year revenues, but maybe more like Tech companies are valued now (P/S 20-30 instead of 4-5)? So, for the Bukhman brothers who own 43% shares, Nexters Global is a long-term play company. They don’t want/need to cash out. I also think that at some point, Tencent could just buy 20-30% of the company through the open market (buying shares). Why? Because it is common for Tencent to buy a stake in gaming companies that earn a lot of cash and priced at these valuations. https://preview.redd.it/uphpbubcimg61.png?width=804&format=png&auto=webp&s=4f35889049fa9302786bf65d1b83f02a92d71eef
Summary
In my personal opinion, this is a great company with a bright future. Valuation seems reasonable and there is a big upside if any of those happens:
Company starts to actively search for acquisition targets (we will see from press-releases)
Company launches "Hero Wars 2" title
The company beats its own low guidance estimates (which I think the most probable)
Company launches more titles which enter “Top ranks” in AppStore/Google Play store.
Aggressive Tencent/Other major Gaming Holdings buying.
At this exact moment, the fair valuation of the company will move to $3-4 billion dollar. (+100% upside). At this right moment of the time as the price is near $10 there is literally no risk in a pre-merger state, as SPAC can’t go below $10 price by its concept. Disclosure: At the moment of writing this article I do have a position in $KSMT, that is not more than 10% of my entire portfolio. I do not plan to sell at any nearest time in future. Stocks are risk assets and this is not investment advice.
Welcome to the boardgames Town Hall. This is an opportunity for us to share some announcements and for our subscribers to discuss the subreddit, make suggestions, and ask the broader community questions.
More "Non-traditional" AMAs
Last year, people expressed interest in AMAs featuring alternative figures in the industry beyond just people immediately behind a recent or upcoming Kickstarter project. With that in mind, we focused on trying to bring on new faces and since then we've had on a much broader variety of people, from designers, to business owners, to manufacturing and fulfillment, and beyond. This year, we're looking to continue that trend. You can still expect regular AMAs from designers and publishers, but we'd also love to hear ideas from you on who you'd like to see featured in future AMAs.
Helping Rebuild Gaming Groups
Back during the height of COVID, the sub ran threads to help players find online buddies for board games before eventually becoming the current weekly BGIF threads. As more and more people get vaccinated, we'd like to stockpile some ideas on how the sub can help reform or create new in-person groups. To reiterate, we won't be implementing these now, but will be using these ideas as thought-pieces for the foreseeable future when in-person Meetups are safe again.
Reopening Applications for New Mods
A new year and an ever-growing sub comes a need for new mods. Prior moderation experience isn't required (though certainly helpful), just a love of board games and a desire to help the sub as it continues growing. If that sounds like you, fill out the application form here. Additionally, boardgames have a few old bots that could use a little elbow grease. We're looking for someone with experience creating Reddit bots to help with tune-ups on the old bots and possibly creating new ones. If that sounds like you, please send us a modmail.
Applying Rule #2
Many of you may already know this, but as a reminder, /boardgames has a zero-tolerance policy for hate speech per Rule #2. Put bluntly, it’s a perma-bannable offense. If you encounter a hateful comment or post, please use the report feature. It may take time for the content to be moderated, but rest assured it will be addressed. This goes without saying, but commenting something like, “Why is this still here?” rather than taking advantage of reddit’s report feature will not expedite the moderation process. Breaking civility guidelines yourself to insult the other person often hurts yourself more than the troll: two wrongs here don't make a right. We urge you not to “feed the trolls". Please downvote, report, and move on. Thank you to everyone that’s already doing this.
Thanks for Keeping Spam off the Sub
Special shout-out to all the users last year who actively reported spam and astroturfing. We had a deluge of such posts from who knows where, trying to cash in from the spiked interest in board games. If you took the time last year to help keep the sub clean, thank you! Since comments easily get lost in the shuffle, the mods will be addressing and answering appropriate top-level topics and questions in a separate thread at the conclusion of the Town Hall. We can't promise we'll answer every single one, but we will read them all. As always, stay safe out there!
GameStop (GME) - Summary of both Bear and Bull cases
Disclaimer: This is not a financial advice and please do your own due diligence before making any financial decisions. Source: Google, Reddit None of this is originally written by myself and the purpose of this post is to consolidate information to portray perspective from both bears and bulls as neutral as possible for the benefit of new GME investors/speculators. You are welcome to leave any valuable information or point out any misinformation in the comments and I'll add them to the post. GameStop (GME) Bear Thesis
Game console cycle in 2020
Boost in revenue due to new console cycle is temporary
Low margin on distributing game consoles
Main profit margin comes from software and virtual goods
Brick & mortar is dying due to digitalization of gaming
Largest profit center for Gamestop is pre-owned and value video game
High revenue but low profit on new video game hardware and software sales
Gaming market is moving towards online game download instead of physical discs (Steam, Riot, Gaming Consoles)
It’s a matter of time game console manufacturers do not need them for distribution or service centers for their hardware
Microsoft deal
A share of Microsoft Xbox’s digital revenue goes to Gamestop
Revenue share unannounced
What’s next after the multi-year deal end?
Revenue share does not include pre-owned console sales
Continued closing of physical stores
Signifies accelerated closing of business
Directors taking profits after record week
Older board members sold part of their shares to profit after the record week
Invisible0815 pointed out " board members most likely sold because they will not stand for re-election in june. AND they didnt sell all their shares. one member had to sell because of his own funds regulations. i bet u, he didnt want to sell (hestia capital, he should be on cohens side cause he hates old management). "
Okay, what happens in the downtime between console releases
OP's reply: Current generation of consoles are still being traded at GameStop, which is one of their revenue stream
Data is a key asset as the company can use it to analyse new trends in gaming Data can be monetized by selling it to gaming manufacturers or developers
Outside of tracking customer behavior on their website and sales and trade-in data what else can they even collect? Developers and manufacturers have multiple, and probably better ways of collecting data already and I don't think whatever sort of data GS can gather will be worth much
OP's reply: Yes, I agree with you that developers and manufacturers have their own way of collecting data. However, GameStop will be able to provide data on the market overview of the gaming industry if they manage to pull of being a centralized e-commerce giant
Turning physical stores into a showcase vendor’s games or new concepts
That's what youtube is for...
OP's reply: I believe there's a market for people who prefer physical roadshows or showcases compared to online videos.
Possibility to create a neutral platform for trading digital goods and charge a small fee for facilitating transactions
Like Steam's marketplace? Aren't most tradeable items on Steam from Valve games? This idea would require games from unrelated devs to have tradeable digital goods and that they would sign it over to GameStop's trading platform, but why would they do that? What would they gain out of it? Or are you talking about digital goods like digital copies of games? No gaming company would allow trading/reselling of digital copies of games. This idea is a non-starter.
OP's reply: I do agree this idea seem far-fetched, but there is a possibility that it can be pulled off.
E-sports tournaments/leagues to be held at physical stores
This idea of turning physical stores into social hangouts like the Warhammer DnD game stores is a little sketchy. Because 1) it requires investment into physical space and 2) it essentially turns the store into a PC bang which only really works in Asia due to costs and culture. Furthermore, why would I go out of my way to play games with a bunch of sweaty nerds at a GS store when I could just do it at home without smelling their BO?
OP's reply: They may convert several stores into PC shops for the purpose of E-sports leagues/tournaments only but not operate a PC shop business. There's definitely money to be made in the growing e-sports scene. E.g. advertising, streaming, etc.
RYAN COHEN: e-commerce
How does his expertise in pet food ecommerce translate into brick and mortar gaming stores?
OP's reply: We are speculating that the management are going to announce their plans between Apr-Jun 2021.
Low price to sales ratio at 0.4476 as at 15/1/21
Well, yes, because there's no clear path to long term revenue
Bear case conclusion: Business turnaround fails and trend towards book value at a price target of $5. Bull Thesis
Nintendo next game console in 2022
4th year into Nintendo switch’s 7-year life cycle, estimated new console launch in 2022
Continue to be a distributor for game consoles and benefit from Nintendo’s new console launch
Estimated total addressable market for gaming of USD151Bn and growing
Established relationship with 42 million gamers through PowerUp Rewards loyalty program
15.2 million members have purchased or traded at GameStop in 2019
Data is a key asset as the company can use it to analyse new trends in gaming
Data can be monetized by selling it to gaming manufacturers or developers
Vendor partnerships
Turning physical stores into a showcase vendor’s games or new concepts
Opportunity to monetize publisher and console manufacturer relationships
Possibility to create a neutral platform for trading digital goods and charge a small fee for facilitating transactions
E-sports tournaments/leagues to be held at physical stores
Brand recognition of GameStop and a lack of centralization for gaming
Opportunity for GameStop to be a centralized e-commerce platform for gaming consoles, digital games, merchandise, customization of computers, laptops, gaming chairs, etc.
Low price to sales ratio at 0.4476 as at 15/1/21
Board refreshment - Ryan Cohen, Alan Attal and Jim Grube previously from successful Chewy Inc. (CHWY)
Proven successful e-commerce track record
Acceleration of digital transformation with new board members
RYAN COHEN
Founder of Chewy
Largest e-commerce acquisition. Sold Chewy to PetSmart in April 2017 for USD 3.35 billion
Chewy went public in 2019 at a valuation of USD 8.7 billion.
Saw an opportunity in GameStop and took a stake of 12.9% as of latest SEC filing
Potential short squeeze (Speculative)
Estimated short interest of 138% not covered
Any positive news or materialization of bull case may send share price further up
Eventually shorts may have to cover and send the share price even higher
OCOWAx pointed out that ethandavid did a DD on GME converting stores into PC kiosks, link below
Bull case conclusion: Successful business turnaround and prove going concern. Being an e-commerce leader in the gaming industry. EDIT: Positions 900 shares @ 36.55 https://preview.redd.it/wcrk8wfkdvb61.png?width=295&format=png&auto=webp&s=fa357433f3fabf0e29f720a27a90532e74696c6f EDIT 2: Gave Ryan Cohen his own section in a seperated bullet point as requested in the comments. And thank you Invisible0815 for the additional information on Directors sale of shares, added in the Bear Thesis above. EDIT 3: Updated bull case: OCOWAx pointed out that ethandavid did a DD on GME converting stores into PC kiosks Updated bear case: baystreetdegenerate have some valid counterarguments against bull case, these are added to the bear case.
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10 POSITIVE Trends That Should SHAKE UP Gaming - YouTube
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