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Hostile takeover time? Stock nose-diving today
AranStormah
Member Posts: 278
The Funcom stock is now even lower than it was during the mini-stock crack around Christmas. It's about the time when big companies like EA shuffles out of their crypt and emerge into the moonlight to prey on weaker gaming companies.
So who do you think would be interested in Funcom's company, or buying them for the sake of getting hold of Age of Conan (and the Anarchy Online and Dreamfall IP)?
I used EA as an example, because I have a feeling they'd be the first to pounce on the chance, but it's not like they'd be the only ones, right?
Comments
It won't happen.
Any company that buys Funcom will have to deal with too many issues
1. The company is publicly traded, which means the process will take at least 6 months. In that time, the new company will have to trust that Funcom can maintain a decent amout of subscribers.
2. Funcom is in a lot of debt. Why would a company pay money to buy a company that is in debt, is losing money, and doesn't have a single product that generates a profit.
3. Developers - MMORPGs are enormously complicated. If a new company bought Funcom, they would basically have to keep the current AOC developers. Look at how well the developers of funcom are doing.. would you really risk your money and think they could turn things around.
When MMORPG's tank and later get bought out.. it's AFTER the game is stable and not bleeding. If IF IF IF funcom ever gets itemization, seiging and PVP working in the game.. the game might have a chance to be sold off. But right now, the game is actually deterioriating. Anarchy Online has a much better chance of being sold than AoC... just because the game is stable, and a new dev team could transition in. AOC is too broken.
AO, and later AoC might by bought, but there is no way a company would buy Funcom just because of the debt issue
Umm you guys know that stocks don't exactly show the condition of a company, right?
So I take it you do not run a business, much less a publically traded one.
The stocks tell us something about how costly it'll be to get hold of a majority share in the company. And their stock is über low right now.
If we are lucky SoE will take it over, they can't do any worse than Failcom has.
Wait 6 months. Funcom will be trading at $9 or lower. (My 6M est. is $7.50)
Lit
Considering they have gone form $54 to $16 in 2 1/2 months don't think its going to take that long. They are lower today than they have been in the last 52 months.
I say if anyone can turn AOC around Sony can.
We all know the original state of Vanguard ,look at it now ..I play it and the game is brilliant.Also they support games like the Matrix which are even less popular than Vanguard
Yip SOE is there salvation if hypothetically someone would take AOC over
"after the time of dice came the day of mice "
AO and Vanguard are two special games.. The development team actually ended up making the game playable 6 months after release. In other words.. if a new player joined AO and Vanguard 6 months after it was released, they would enjoy the game and stay. AoC is NOT in that state yet... if a new player joins today, they are no more likely to subscribe after their free month as the players back in June.
Sony will not buy the game in the current state because they would have to count on the current developers to 'fix' the game. It would take a long time until Sony could get their own developers aquainted with the game enough to fix it. When the game is fun, and stablized at 50k subscribers is when Sony would buy it.
AO and Vanguard are two special games.. The development team actually ended up making the game playable 6 months after release. In other words.. if a new player joined AO and Vanguard 6 months after it was released, they would enjoy the game and stay. AoC is NOT in that state yet... if a new player joins today, they are no more likely to subscribe after their free month as the players back in June.
Sony will not buy the game in the current state because they would have to count on the current developers to 'fix' the game. It would take a long time until Sony could get their own developers aquainted with the game enough to fix it. When the game is fun, and stablized at 50k subscribers is when Sony would buy it.
I hear you...good point .It's not worth SOE time at the moment to buy the game due to the innumerable issues ..if it was for sale
"after the time of dice came the day of mice "
I seriously doubt that SoE is gonna pick up AoC... The logistics of transfering the knowledge and programers from Norway just isn't gonna work... Unlike SoE I don't think funcom can survive long enough to turn AoC around and they certainly won't survive long if they Don't start chopping their staff substantiallly. That is hard to do when you are the team that made the game...
I'm not sure there is any company that makes sense to pick up AoC that can continue to develop it and make it the game it could become. So this probabably means that Funcom is gonna be throwing out patchs to fix things in a panic and the quality will probably get even worse which will make subs leave faster. Then they will cut staff and patches will become slower and slower. Maybe the quality will improve but the substance will decrease.
Funcom will probably at some point start trying to spin up another game and get investment money to keep things afloat. Unfortunately with AO and AoC both having not done well it is gonna be hard for the funcom hype machine to convince investors to put money into a new game.
So I'd say the future for Funcom and AoC and AO for that matter is looking really grim... Maybe the guys that do Eve might be suckered into buying AoC....
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Ethion
I think the stock can go much lower. Think about the "assets" of the company:
1) Anarchy Online (doesn't make much money)
2) Age of Conan (going down the tubes fast)
That's it. Funcom has a few games under development, but they need the cash from Age of Conan to fund that development expense. I suspect that Funcom's cashflow from Age of Conan will drop so fast that they will not be able to fund the development of their next game. Eventually, Funcom will need to either issue more debt/equity to fund development of the next game and/or 2) sell Age of Conan to another game company for cash in order to fund future game development.
Just really sad. Unless they can really turn AoC around, I don't see how this stock does well.
Auto Assault never got rescued, PlayNC and netdevil dropped it when it become unviable.
It's all sad sad news, and they have noone to blame but themselves.
The game had potential. But it was not complete. And they lied.
Surely they could have done something different - declared it 'retail development' phase, where you pay for the box but no monthly fee until the game is finished. Or some such.
The fact that they went for the full pay model with a game that did not have what was promised, and poor performance, and is now a duper/botter heaven... well.
Just sad.
Unlike some I do not celebrate this.
I like to see Funcom get its come-uppance, but a game I had really wanted to work, and was the closest thing to what I wanted in some time, has proved a crashing disappointment.
Please Mythic, don't fail us now!
AO and Vanguard are two special games.. The development team actually ended up making the game playable 6 months after release. In other words.. if a new player joined AO and Vanguard 6 months after it was released, they would enjoy the game and stay. AoC is NOT in that state yet... if a new player joins today, they are no more likely to subscribe after their free month as the players back in June.
Sony will not buy the game in the current state because they would have to count on the current developers to 'fix' the game. It would take a long time until Sony could get their own developers aquainted with the game enough to fix it. When the game is fun, and stablized at 50k subscribers is when Sony would buy it.
I do think it all depends on how much they play and their tolerance level. If they are casuals and use 1 month to reach level 40-50 they will think the game is the same the remainder of the time and subscribe. Also depends on any crashes. In my experience most people are very tolerant of bugs and minor issues.
RIP Blackguard. May a resurrection come.
But here is the big difference
Back in late June, when many causal players were in their 40's.. the hardcore players were just beginning to figure out that endgame was terrible, the casuals didn't know about it and subscribed.
If a new player starts right now, they hit 40 at the end of the month.. there are plenty of places for them to learn that endgame is terrible. The community in this game (both ingame and forums) is much much more negative about the future of the game then they were back in June.
With all the press, there is absolutely no reason for a new player to play AOC rather than Warhammer. AOC had probably the worst, or second worst launch ever.. you'd be hard pressed to find anyone who thinks Warhammer could do worse.
Lets remember nine times out of ten , Development failures are a direct result of poor management. Poor focus leads to bad products , If Funcom was spending half the time they spend silenceing customers on answering to them and focusing development on those complaints things would be far different right now.
For every minute you are angry , you lose 60 seconds of happiness."-Emerson
Funcom is still extremely overpriced. It would need to fall below $5 a share to be a value as a take over target, if then.
It is possible another company could make an offer for the game. Funcom doesn't seem to be managing costs very well, another company might be able to run it more efficiently and turn a profit. However, Funcom would have to be in desperate straights to sell off the title. It's should take them a while to bleed through thier cash on hand, even if they can't turn a profit from AoC.
I still can't comprehend what they were thinking with the rushed launch. They had the cash needed to continue development for another year or more. The game clearly had huge potential with tuning, polish and a lot more content.
Why throw it all away? They didn't even manage a profit for the quarter when the expenses of the launch balanced off against revenue.
Want to know more about GW2 and why there is so much buzz? Start here: Guild Wars 2 Mass Info for the Uninitiated
Just blows my mind that they never tested large scale seige PvP in Beta. They just relied on NPC simulations. WTF???
Ultimately, that's the decision of the investors, not Funcom. The only way Funcom can prevent it's sale out from under itself or investor forced bankruptcy would be to buyout every investor. I doubt they have the funds to do so without a total shutdown.
Word.
Anyway the core engine of this game was not well thought through. The game is to heavy to fix with the unchangable core engine. I told them in beta, but they ignored me totally.. well so much for being a beta tester.. whats the point in having people test the game, when they dont listen to people with feel for MMORPG dynamics?
From here, with 2007 earnings per share of 0.04 -- $5 is still grossly overpriced (p/e of 125). It's even worse at the 2nd quarter of 2008 with negative eps.
It will take a huge amount of confidence -- or a huge amount of ignorance, or both -- from any company willing to take over Funcom at that p/e ratio.