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Technology Stocks : GTIS - Will it be a Phoenix or not ?
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To: Pi who wrote (2132)2/15/1999 11:56:00 AM
From: telecomguy  Read Replies (1) of 2319
 
Tks for your response Pi.

You are right I need to catch up. I don't even play games so I am not in a good position to even evaluate the product development/creative side of GTIS. But I do have lot of experience with business in general and the impact of new technology (Internet) on traditional businesses.

I have checked out THQI, IPLY, MWY so far and have the following fundamental questions to pose to value investors out there.

1) Is GTIS primarily a distribution company or do they develop lot of their own games. It seems to me that they do both but I don't know what the split is in terms of the company focus/resource.

2) The new Disney guy --- was he brought in to bring some professional mgmt in general, beef up the distribution or straighten out their Product Development side? Or all three? I imagine he will be able to license Disney characters through his connection?

3) Why is the GTIS Receivable & Inventory figures look so terrible? Is there a big write-off potential here which will kill future earnings? For a company that made good profit last quarter (over 30 million I believe, their cashflow sucks --- where is it all going?)

4) I looked at Midway (MWY) and this company appears to be better managed. Certainly their receivables & inventory is lot cleaner than GTIS and their valuation is quite reasonable. What do you think of MWY? Are they mostly creative/product development shop? Or do they also directly distribute/sell games?

My last & perhaps most important question to raise concerns Internet & distribution. It seems to me that Games are a perfect product to demo & sell on-line through e-commece oriented Web Portals like Amazon.Com. Is GTIS pouring $$$$ to create their own Web Site to market their (and other licenced games) software games? Or are they actively trying to engage in strategic alliances with companies like Amazon, Egghead, etc. that can drive their sales through the Internet.

Right now there is a big push towards more bandwidth (witness AT&T/Cable deal, ADSL, @Home, Wireless etc.). Everyone will eventually have broadband access to the WWW and when this happens, I see incredible opportunities for game developers as all kinds of new markets open up.

I imagine 90% of GTIS's revenue is still coming from the Bricks & Mortal retail stores? How many of their own stores do they operate & what % of revenue is derived from their own stores?

I sense a seismic shift & ballooning market opportunity (primarily as the result of Internet technology) and there may be some BIG winners among the players you & I have mentioned.

The key is to pick the right MicroCap which will win out.

Any thoughts?
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