Brilliant Digital Entertainment develops Multipath Movies.
These are three-dimensional digitally animated stories with
hundreds of plot twists that a player controls. Brilliant is
one of the most undervalued companies in the interactive
entertainment software industry, trading at only 6.8 times
its expected 1998 earnings: more than a 75% discount to its
group.
Brilliant posted positive earnings in Q3 and has four movie
titles completed. Another 29 are in development for this year.
It has relationships with Warner Brothers, DC Comics, Universal
Studios and Bantam Doublday books, with the licensing rights to
make adventure game movies based on the characters Superman,
Popeye, and Xena: Warrior Princess. Brilliant also has a wide
range of proprietary software to develop content internally,
including my personal favorite interactive movie, Cyberswine.
Other strategic partners are Packard Bell NEC and Compuserve.
Packard has agreed to pre-install Brilliant's Multipath Movies
on up to 6 million of its shipped computers starting this month.
And Compuserve has agreed to offer BDE's Multipath Movies on a
pay-as-you-view basis to its 1.5 million members. The movies will
be available on CD-ROM as well at retail outlets such as Best Buy,
CompUSA and Egghead Software. Brilliant also plans to sell the
movies to cable channels and the home video market.
Brilliant has no debt and $14 million in cash. It raised funds
from a secondary offering in December 1997. The lead managers
of the deal were Credit Suisse First Boston and Cruttenden Roth.
CS First Boston is expected to initiate coverage in the days
ahead. Finally, Cruttenden expects Brilliant to earn 70 cents a
share in 1998 and BDE only has 10 million outstanding shares.
Cruttenden's 12-month price target is $15. |
