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Strategies & Market Trends : Value Investing
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To: brasilboy46 who wrote (43806)8/9/2011 4:53:51 PM
From: Fred Rhodes  Read Replies (1) of 78751
 
I am doing a bit of reading of GRVY. I've not done any of the fundamental calculations but I've come across some concerning things:

1. The PFIC thing. Does anyone know how this affects Canadian investors?
2. The fact that another publicly traded company on the Japanese exchange, GungHo, owns nearly 60% of the common stocks of GRVY. This company is also an online games developer and distributor, just like GRVY, which is a giant conflict of interest. I haven't had time to do more research on GungHo yet, but I'll keep an eye out. Has anyone heard anything about GungHo in regards to GRVY?
3. The major income source for GRVY is Ragnarok online, which is an ok game, and seems to be doing the best in Japan, which is their major market. The sequel hasn't come out yet and I haven't heard much about it in the press. I wonder if it can compete vs other large games like WoW. If Ragnarok fails, GRVY is toast.
4. They seem to have bad relationships with their major minority shareholders. Given this, they have no business insurance. This looks like a risky situation.

I'm gunshy about approaching this company for an investment. It seems it just has a whole lot of money that it doesn't know what to do with. Anyone else care to share their assessment?
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