I don't think that EIDSY is a bad company and I'm still convinced that the TR success story is going on. However, I got out at 24 1/2 in
order to lock in my profits. Last year I made the mistake to buy more shares at 19 1/2 in May (I was convinced the institutions are finally looking at EIDSY as a growth stock and not a "one hit wonder company") and I saw all my nice paper profits go to hell after this stock fell below 10. I don't want to make the same mistake a second time, so my advise for all EIDSY investors who bought at low levels before Xmas is: Take your money and run. You can always buy back your stocks.
Here are some arguments why to sell now:
-EIDSY has just announced incredibly good earnings. They simply can't be topped by the upcoming quarter earnings: We're going into summer with slow sales of entertainment software, and under EIDSYs accounting policy the R&D expenses are booked when they incurre, so even good sales during the summer (like last year with Commandos and Final Fantasy VII) are outnumbered by the expenses of the 40 !! projects that EIDSY currently has.
-I don't like the situation at Ion Storm! EIDSY has already given 20 mill. $ in advance payments to John Romeros company and the release of Daikatana is rescheduled month after month. So far the only product EIDSY has published from this company is the flop Dominion Storm, so it's unsure whether Daikatana can really compete with programs like Quake 3 or Half-Live.
-The sale of 200,000 shares owned by EIDSYs board member SB Streater,
is also a sign that even the directors think that it's time to take some profits. This sale indicates that a takeover of EIDSY by another
company like Sony or Bertelsmann is clearly NOT in the making right now.
-Concerning the developers of Commandos: Pyro Studios from Spain:
EIDSY has only a contract to publish Commandos 1 and 2 (including mission packs), but so far no agreement about Pyros other projects have been reached (after the success of Commandos there are likely other publishers, which are also interested in these programs).
-Same thing with Looking Glass: System Shock 2 which uses an improved "Dark Project" engine is published by ERTS.
-Regarding EIDSYs in house productions, the TR trilogy was so far the only "real" mega seller. For example Core Design has produced Fighting Force in 97 (should be a new genre regarding the press releases, but was only a "quite normal" Beat-Em-Up) or Ninja for PSX in 98 (better than TR 2 regarding Core Design, but wasn't a mega hit either).
Another supposed TR-killer was Deathtrap Dungeon which was produced in collaboration with EIDSYs chairman Mr. Livingstone. Although it had good graphics, nice animations and even a good looking heroine, it wasn't a mega hit (In fact I just saw a CD with the full version of DD at a computer magazine priced for 11 $, compare this with the success of TR 2 which is an older program but even now sells good as a budget title.).
These are my arguments, and I will encourage everybody who follows my investment advise to take some profits now. I will never, I repeat: never, short a single share of EIDSY. I'm just waiting for another opportunity to buy back shares of this quality company at a lower level.
Greetings,
Kai |
