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Non-Tech : KIDE a good play to capitalize on Pokemon craze -- Ignore unavailable to you. Want to Upgrade?

To: Sir Auric Goldfinger who wrote (576)	10/26/1999 10:08:00 PM
From: DAY TRADER	Read Replies (1) \| Respond to of 1239

KIDE may go down a few points but not until it has hit $250 per share! LOTS more play on this baby! LOTS!!! Thanksgiving isn't even here yet. DT

To: Sir Auric Goldfinger who wrote (576)	10/26/1999 10:21:00 PM
From: Louis Riley	Read Replies (4) \| Respond to of 1239

If one works the numbers backwards on the recent 8-K, assuming (generously) that 4Kids gets a 3% commission on royalties and a 40% net margin (a very generous assumption after management's ~13% top-line skim and at least a 35% tax rate), one comes up with these estimates: Hasbro's minimum guarantee of $15MM/year works back to $1BB in retail sales: $1,000,000,000 retail x 50% = $500,000,000 wholesale x 3% commission on royalties = $15,000,000 revenue to 4Kids Now, let's be generous and double that revenue to account for all the other smaller licensees (even Topps only sees $100MM retail) and revenue streams in the mix (the movie, TV, WCW, et al). Now we are up to $30MM in revenues for 4Kids. 40% net margin = $12MM net income $12MM net income / 12,315,092 fully diluted shares out = Annual earnings of $.97/share. So at today's close KIDE trades at 81X estimated earnings, A market cap of $971,352,882, And a Price/Sales ratio of 32X estimated sales. Those are pretty pricey valuation metrics for a company with a product with a finite life span (read: fad), even if it is as ubiquitous as the Mighty Morphin Power Rangers were five years ago. BTW, anyone know what happened to their agent? I think the company was called Happiness Express. It was eventually delisted from the Amex as I recall. Yeah, yeah, it's been huge in Japan for almost 5 years. But how huge, really? Al Kahn guessed at $2BB total merchandise sales last year on one of the recent conference calls – and that's after 4 years into the fad. Don't forget that Nintendo is the REAL pure Pokemon play: the majority of the $5BB retail sales figure that is often bandied about is game / cartridge sales. And it's time to mention a fact I have never seen anyone bring up: the company's largest institutional shareholder in the infamous Emerald Advisers / Emerald Research. For those of you who don't know your recent history of Wall Street hype, Emerald principal Joe Besecker (the friendly tout who hosts all those Vcall interviews) was the “analyst” who found Iomega in 1995 and Zitel in 1996. He loved them both all the way up to the top. He finally dropped coverage of IOM last week. Not sure how far down they rode ZITL. Not a short, just a realist. In fact, I was long all the way up. Does this reality check redeem me for KTEL now? I want some forgiveness.