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Technology Stocks : ACCLAIM Entertainment

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To: Kenan who wrote (2064)5/6/1998 11:54:00 AM
From: Kenan  Read Replies (1) of 4149
 
Let me first say that I am semi-long on AKLM and I do realize the risk of an investment like this, but consider:

People on this board have concentrated solely on the revenue side of this stock which is undoubtedly on the up and up. Though I believe that this is a good buy on those grounds alone I invite you to consider the dramatic measures Acclaim has made in decreasing their costs.

All results are from this recent quarter ended compared to the same quarter last year. Got info from SEC 10-Q

Cost of revenues (buying of inventory), was only 47.9% of revenues this year as compared to 53.1% of revenues last year. But the BIG improvement was in operating expenses. 52.1% of revenues were used to pay for operating expenses (advertising, payroll, depreciation, research and development) this quarter while 80.2 % of last year's quarter's revenues were used to pay for operating expenses. This is an outstanding improvement in cost control.

As far as forecasting the success of Forsaken PC I believe that the battle must be won in the stores like Best Buy, CompUSA, and Circuit City. Hardcore Gamers don't like to pay the high prices of an Electronics Boutique, Egghead, or Babbages.

I've contacted the EB in Ithaca New York and they told me that sales have been average, but they are expecting nintendo64 sales to be much better than PC sales.

On another positive note the highly watched videogame site IGN64.com has rated Acclaim's All-Star Baseball 99 their game of the month, and this is over both Nintendo's and GT interactive's baseball games which are coming out in May.

kh
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