Activision....Returns! Message Board

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Technology Stocks : Activision....Returns!

ATVI 94.42

0.0%

Oct 13 5:00 PM EST

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To: Burlitis who wrote (1353)	1/13/1999 8:10:00 PM
From: Tom Caruthers	Read Replies (1) of 1992

Hi Alex, I was in the midst of listening to the replay when you posted. Thanks!! Good summary! Guidance for the 4th quarter said maybe a couple of cents higher, likely due to release of Heavy Gear 2....man...they have LOW expectations for this title. 1-2 cents is $250-500K....that's shipping a really low number. That's mangament's problem. One thing is to be conservative and don't tip your hand so you have a surprise to the upside. But I think management has such low expectations for some titles, that they won't put the dollars in to market it. To them, it's just another title....predictability...YAWN is right. It is entirely possible to make a great game into a great selling game. Heavy Gear 2 will be a great game....if the demo is any guide. And if it ends up with the same fate as Battlezone...I will be royally pissed. If anyone from Activision wants to post something on this board or tell me I'm full of BS...mail me at tomcaruthers@hotmail.com I will post it here. Well, Fiscal 2000 looks pretty good. I'm surprised nobody asked about a pending acquisition.... For the record...breakdown for Fiscal 2000 500-550 million revs. 55% pub/45% Dist 57-59% product cost 11-13% Royalty 13-15% marketing Fixed: $25-27 million production costs $20-22 million SGMA $1.6 million amortization $2.2 million net interest expense 38% tax rate 27.3 million shares diluted Fixed costs total$:$ 48.8- 52.8 Variable costs %: 81- 87% After variable costs: Get $65-95 low end, $71.5- $104 million high end. After fixed costs: Get $12.2 million low end to $55.2 million high end. After tax: $7.5 million net income low end to $34 million high end or range of $0.27-$ 1.35 EPS vs. $0.63 estimated this year. Not much help in terms of guidance. Mgmt is guiding $0.85 EPS for next year. EPS of $0.65 for this year puts P/E at 18-19. Looks like $17 in a year or 40% gain for the year conservative based on P/E of 20. Based on expected growth of 35%, trading at a P/E of mid 30 can trade as high as $25 or more than 100% return. Oh.... screw it. Stick this one in a drawer and turn the lights off. Tom

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