Mike, why do you think it's godzilla game rather than gorilla? In any case, I thought about it, read our boards & the Motley Fool piece, and took a small stake this a.m. I liked these points from the Fool (may have been posted here already):
Capital expenditures were a paltry $527,000, so this business is far from capital intensive. Compare that to TV Guide, which spent $3.4 million in cap ex last quarter alone, and it's easy to see why people are worried that today's news will end up packing on unwanted pounds to Gemstar's svelte business.
However, the opportunity for a full-scale monopoly in EPG could prove to be well worth the risk. TV Guide's strong ties to the cable industry will complement Gemstar's leading position in everything else, from TV and VCR makers to broadcasters to satellite programmers. It's not too far-fetched to imagine the combined company's EPG one day becoming a must-have portal for enabling interactive TV, with outrageous margins from dual licensing and advertising revenue streams. Investors wondering where TV is heading should tune in and take a closer look
Myself again: I don't really care if the price fluctuates near-term. Lindy may be right that next week may have a better entry point than yesterday or today, but it seems like they have positioned themselves for something great, and I decided it's worth an initial position. Whether they can handle the merger well, and transition from a small company to a mega-lop-oly without stumbling--well that's all part of the excitement of this game, I guess.
In regards to that, thinking of Q again & their management--I know it's been discussed before, but it's very interesting to see how their management has been handling the company lately. We only learn about management's genius or lack thereof through experience.
Jill |
