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Morning Metaverse

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12. Re: Morning Metaverse May 9, 2012, 21:24 Kitkoan
 
killer_roach wrote on May 9, 2012, 15:52:
Parallax Abstraction wrote on May 9, 2012, 14:12:

What Apple has going for it is an absolutely ridiculous profit margin (in the range of 30%)... that gives them a lot of room to play with going forward. If sales drop off, they can always reduce prices or introduce hardware with narrower margins if need be and remain profitable.

It's already being questioned if Apple is going to be selling the Macbook Air for $799 so that would be a sign of their dropping sales (OSX sales were down this year). I think part of the issue of as to why might have been because the honeymoon is over for many of their customers. I've had friends point out that their Mac was their first and last one they will buy for many reasons. All of them being around the hype of Apple and the reality being far different.
 
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11. Re: Morning Metaverse May 9, 2012, 15:52 killer_roach
 
Parallax Abstraction wrote on May 9, 2012, 14:12:
Given that Facebook has openly admitted that they have no idea how to monetize mobile users of their site which is quickly becoming how the majority will access it says a lot. I also wonder how many investors are going to be smart enough to sell their Apple stock because the fashion bubble on them bursts and their sales drop to a sustainable level. That stock is going to drop like a rock when the current unrealistic growth plateaus.

What Apple has going for it is an absolutely ridiculous profit margin (in the range of 30%)... that gives them a lot of room to play with going forward. If sales drop off, they can always reduce prices or introduce hardware with narrower margins if need be and remain profitable.

Agreed on Facebook with mobile users, though. I actually read through the entirety of their S-1 filing (almost 200 pages!), and the thing that struck me the most was the fact that Facebook in the past year has had their revenues roughly triple but their profit has slightly declined (not profit margins, gross profit). This raises all sorts of alarm bells in my head, everything from possible problems with their organizational structure to overhiring for areas where growth was not as fast as anticipated to, going back to the Zynga example, overpaying for hot companies ($1B for Instagram? Really?).
 
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10. Re: Morning Metaverse May 9, 2012, 14:25 Beamer
 
killer_roach wrote on May 9, 2012, 14:06:
Beamer wrote on May 9, 2012, 13:52:
Very out of whack.
But buying OMGWTF or whatever that company was is a bit ridiculous. One product of value with very quickly diminishing user count.

But hey, this is the year of the 1 billion dollar company with no revenues.

Zynga was worth as much as $11 billion before the downward correction started... if they stop with the dumb acquisitions they might be able to settle in to a place where the stock makes sense around $5-6 a share (market cap of about $4-5 billion), but "growth by acquisition" is a dangerous strategy for a company that's not already matured.

Could be worse, could be the Facebook IPO that's upcoming, which I wouldn't touch with a ten foot pole. It's profitable, but it's spiraling upward in size without improving its profits. (Unless you are assuming the company will start seeing its profits mushrooming, its earnings would indicate a market cap somewhere in the $10 billion range, not an order of magnitude higher.)

Growth by advertising was working out worse for them. Inorganic growth has proven the cheapest way for them to acquire new users.
Which says a lot about how costly organic growth was.
 
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http://www.hydrahead.com
http://www.painkillerrecords.com
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9. Re: Morning Metaverse May 9, 2012, 14:12 Parallax Abstraction
 
killer_roach wrote on May 9, 2012, 14:06:
Could be worse, could be the Facebook IPO that's upcoming, which I wouldn't touch with a ten foot pole. It's profitable, but it's spiraling upward in size without improving its profits. (Unless you are assuming the company will start seeing its profits mushrooming, its earnings would indicate a market cap somewhere in the $10 billion range, not an order of magnitude higher.)

Given that Facebook has openly admitted that they have no idea how to monetize mobile users of their site which is quickly becoming how the majority will access it says a lot. I also wonder how many investors are going to be smart enough to sell their Apple stock because the fashion bubble on them bursts and their sales drop to a sustainable level. That stock is going to drop like a rock when the current unrealistic growth plateaus.
 
Parallax Abstraction
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8. Re: Morning Metaverse May 9, 2012, 14:06 killer_roach
 
Beamer wrote on May 9, 2012, 13:52:
Very out of whack.
But buying OMGWTF or whatever that company was is a bit ridiculous. One product of value with very quickly diminishing user count.

But hey, this is the year of the 1 billion dollar company with no revenues.

Zynga was worth as much as $11 billion before the downward correction started... if they stop with the dumb acquisitions they might be able to settle in to a place where the stock makes sense around $5-6 a share (market cap of about $4-5 billion), but "growth by acquisition" is a dangerous strategy for a company that's not already matured.

Could be worse, could be the Facebook IPO that's upcoming, which I wouldn't touch with a ten foot pole. It's profitable, but it's spiraling upward in size without improving its profits. (Unless you are assuming the company will start seeing its profits mushrooming, its earnings would indicate a market cap somewhere in the $10 billion range, not an order of magnitude higher.)
 
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7. Re: Morning Metaverse May 9, 2012, 13:52 Beamer
 
killer_roach wrote on May 9, 2012, 13:48:
Creston wrote on May 9, 2012, 12:16:
EA CEO John Ricitieieieitielelelo, after having recently spent 1.25 billion dollars on Popcap, and other notable acquisitions such as Bioware for 640 million dollars, and Mythic software (now no longer in existence) for ~300 million dollars, says that Zynga paid waaaaaay too much for whatever for 180 million dollars.

Or, to summarize:

Pot to kettle: "You are black."

Creston

Zynga's market cap: $6.57 billion
EA's market cap: $4.89 billion

Needless to say, those numbers should seem as out of whack as they appear (especially considering EA, unlike Zynga, was profitable last quarter).

Very out of whack.
But buying OMGWTF or whatever that company was is a bit ridiculous. One product of value with very quickly diminishing user count.

But hey, this is the year of the 1 billion dollar company with no revenues.
 
-------------
Music for the discerning:
http://www.deathwishinc.com
http://www.hydrahead.com
http://www.painkillerrecords.com
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6. Re: Morning Metaverse May 9, 2012, 13:50 Creston
 
nin wrote on May 9, 2012, 13:30:
Careful Creston, you'll cause EA's stock to tank.

Er, wait...

Awesome! Ricieeiieteetetelo is a FUCKING MORON!

*watches stock go down another 10 cents.*

Giggle

Creston
 
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5. Re: Morning Metaverse May 9, 2012, 13:48 killer_roach
 
Creston wrote on May 9, 2012, 12:16:
EA CEO John Ricitieieieitielelelo, after having recently spent 1.25 billion dollars on Popcap, and other notable acquisitions such as Bioware for 640 million dollars, and Mythic software (now no longer in existence) for ~300 million dollars, says that Zynga paid waaaaaay too much for whatever for 180 million dollars.

Or, to summarize:

Pot to kettle: "You are black."

Creston

Zynga's market cap: $6.57 billion
EA's market cap: $4.89 billion

Needless to say, those numbers should seem as out of whack as they appear (especially considering EA, unlike Zynga, was profitable last quarter).
 
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4. Re: Morning Metaverse May 9, 2012, 13:30 nin
 

Careful Creston, you'll cause EA's stock to tank.

Er, wait...
 
http://store.nin.com/index.php?cPath=10
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3. Re: Morning Metaverse May 9, 2012, 12:16 Creston
 
EA CEO John Ricitieieieitielelelo, after having recently spent 1.25 billion dollars on Popcap, and other notable acquisitions such as Bioware for 640 million dollars, and Mythic software (now no longer in existence) for ~300 million dollars, says that Zynga paid waaaaaay too much for whatever for 180 million dollars.

Or, to summarize:

Pot to kettle: "You are black."

Creston
 
Avatar 15604
 
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2. Re: Morning Metaverse May 9, 2012, 11:07 CommunistHamster
 
Aol, Myspace, zynga, facebook ipo.  
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1. Re: Morning Metaverse May 9, 2012, 11:02 nin
 

As the saying goes, it's not what something is worth, but what people will pay for it. And this is yet another example of the downside, where they spent waaay too much on something that isn't retaining people now.

Oh, sorry AOL, I didn't see you laying on the floor there.

 
http://store.nin.com/index.php?cPath=10
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