KIDE- Low Float, Nice Financials ?? Message Board

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Non-Tech : KIDE- Low Float, Nice Financials ??

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To: BulbaMan who wrote (34)	11/20/1998 1:43:00 PM
From: jgideon	Read Replies (2) of 227

BulbaMan - Some optimistic numbers, though not out of the question. I would quibble with a couple assumptions. First, this is Nintendo we're dealing with. They have a huge brand name and get a big cut accordingly. The 8% owner's cut may be low, and the 32.5% KIDE cut of that is probably high. Also, I don't see why one needs to suppose that margins will expand from 20% to 30% next year. A less optimistic scenario: -- 2 billion retail -- 1 billion wholesale -- 8% Nintendo cut, 20% KIDE cut ==> 16 million -- 10 million other revs ==> 26 million -- 20% after tax ==> 5.2 million -- 3.85 million shares ==> $1.35 EPS I call this 'less optimistic' instead of 'pessimistic' because it still requires a $2 billion purchasing spree. However, if that occurs, you see the potential for doubling EPS in 1999 over record results in 1998. I didn't question the basic model. Anyone able to enlighten us if there something wrong with the expected royalty distribution? jg

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