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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (74753)	1/1/2024 9:21:11 AM
From: Elroy	Respond to of 78774

I did not say that GRVY does never distribute its cash, but it could be 10 years from now while it’s lying useless in the bank account. This describes 90% of small growing tech stocks. It's normal. They don't have ridiculously low valuations; rather, many of them have ridiculously high valuations. If GRVY were a US company without 59% ownership by parent GUO, it would be 5x it's current price. I haven't done a deep dive into GRVY's relationship with GUO, but if it's "normal" and without potential triggers that can wipe out GRVY investors, then the GRVY discount to normal valuation makes little sense. That is to say, if I had $50 billion, I would buy up the entire public float of GRVY at $80, and also buy GUO, separate them, and sell GRVY to US investors with a 10% of net income dividend and 10% of net income share repurchase program, and GRVY with 2023 $530m sales and $100m net income and $360m cash would probably IPO for $2.5 billion, 5x the current value. Then I would figure out what to do with GUO! And if you wait a year, until the China launch number of 2024 are in the sales, maybe you get $4 billion for GRVY. Come on many, $100m annual net income in 2023 (up 80% from 2022 net income), $360m cash and the market cap of a successful gaming software is ....... $480m? It doesn't make any sense. Compare it to any profitable growing software company and it's the least expensive stock of it's sort, perhaps in the world, by far. Not paying a dividend doesn't explain the valuation gap with ......say, Activision. Or Roblox. Or any of these other software gaming stocks. I don't follow them, but I'm pretty sure they trade at the highest valuations of any stocks in the market. But GRVY (which grows, produces cash, and is highly profitable, and ....... is about to launch for the first time in China, the LARGEST GAMING MARKET IN THE WORLD. But I can't give a reason why the gap will go away, so ....... invest at your own risk.