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Question about funcom stock
oscarkool2
Member Posts: 127
I was looking at the stock before the game released, and it was much higher than it is now. It seemed to reach its peak around the day the game released in May. Now, since I am not a business major and have seriously hardly any knowledge in stocks, I'm wondering why the stock didn't keep going up after release since that is when many people bought the game. Like, why didn't the stock go down after everyone quit? Wouldn't it have gone up til at least June?
Hoping some smart business dude can give me a run down on how it works so I and others don't make the mistake of buying stock near release dates.
Thanks.
Comments
theres's some factors involved.
1. stock mart is all physcological, when somethng is hot everyone wants to be on board. thus overvalueing a stock. According to numbers on their portfolio they would not have estained a $55 value even if by some miracle it had 100% subscription retention.
2. alot of people don't seem to like the game, thus consumer confidence in the product is low.
3. the global market video games and all are effect by the current economic turmoil.
If you look at Activision/blizzard they've lost about 30-40% per sharevalue in the past month. this doesnt refelct on how well or bad they're company or products are, it's such the world economy is in borderline ruins.
In my opinion all video games stocks are currently undervalued and if you have some money to spare, I would invest soon.
and yeah you wouldn't want to ever buy video game stock close to a release. Just have this easy philosophy in mind. "buy low, sell high"
A stock price is much more 'future oriented' then that. The stock prices rise was caused by how many pre-orders were being talked about and the number of people signing up for beta. Then, even though it was selling a ton of boxes, the stock plummeted because investors knew not many of those box sales would be translated into subscribers.
A stock's price is more about guessing the future then it is about 'how many boxes did it sell today". So while Funcom was saying " #1 selling game of all time".. investors were asking "how many subscribers in 6 months"... a good investor is always asking 'the next question' ahead of what the news currently is.
There are also crazy things like expectations that will cause a stock to drop. Lets say a company announces that it is going to triple it's sales next year. Great news...the stock goes up from 5 to 15. A month later, the company says "sorry, we only doubled our sales". The stock will drop down to 10. Overall, the stock price doubled.. but some may look short term and say "Omg, the stock went from 15 to 10".
if it were easy, everyone would be making money in the stock market
A stock price is much more 'future oriented' then that. The stock prices rise was caused by how many pre-orders were being talked about and the number of people signing up for beta. Then, even though it was selling a ton of boxes, the stock plummeted because investors knew not many of those box sales would be translated into subscribers.
A stock's price is more about guessing the future then it is about 'how many boxes did it sell today". So while Funcom was saying " #1 selling game of all time".. investors were asking "how many subscribers in 6 months"... a good investor is always asking 'the next question' ahead of what the news currently is.
There are also crazy things like expectations that will cause a stock to drop. Lets say a company announces that it is going to triple it's sales next year. Great news...the stock goes up from 5 to 15. A month later, the company says "sorry, we only doubled our sales". The stock will drop down to 10. Overall, the stock price doubled.. but some may look short term and say "Omg, the stock went from 15 to 10".
if it were easy, everyone would be making money in the stock market
The stock price was/is linked to the subscriber base. The recurring charges are where the money is, as providing the user a connection for 15$ or 19$ a month is very profitable. Do this math - there are 11 million + Subscribers paying to play wow right now. So lets just round it off since some get like 11.99 with a 6 month sub and some go month to month at 15$ lets say 13$ a month. 13$ x 11 Million = ? Thats money for housing the code and watching the servers, basically packet passing. Thats 143,000,000 amonth before percentages from gamecard issuers and credit processors over head and all that, but at the end of the day its still very much like printing money. When it became very clear that the subscriber base for AoC wasnt going to be a cash cow, money printer, funcoms shareholders decided to jump ship. Thats what sent funcom tumbling.
Funcoms investors knew very quickly that the subscriber base was not going to be a success and began to sell out. They wanted to see an expanding subscriber base and not a shrinking one at launch. The people that lent funcom money to develop AoC did so in hope of profiting from the monthly subscriptions.
In MMOS - ITS ALL about the monthly fee my friend.
EDIT: There are of course other costs associated with managing any game, esp wow. Customer Service in and out of game etc etc etc.... Im just saying I dont think these costs come ANYWHERE near 143 million a month, and even if my figures are wrong, once you spent the cash to develop the game, the bulk of expenses are over.
Some people are like slinkies, they dont really have a purpose, but they still bring a smile to your face when you push them down the stairs.
http://www.akgame.com/news_display.html?pages_id=182 A link to a slightly more informative poster. <Mod edit>
Some people are like slinkies, they dont really have a purpose, but they still bring a smile to your face when you push them down the stairs.
Jul 07, 2008 (NORDIC BUSINESS REPORT via COMTEX) -- JMBKF | Quote | Chart | News | PowerRating -- Swiss-Norwegian computer games developer Funcom NV (OSE: FUNCOM) said on Monday (7 July) that it has sold its Norwegian subsidiary Plutolife AS to the Australian mobile content company Jumbuck Entertainment Ltd (ASX: JMB).
I had not known this prior to today and doing a little stock surfing. Jumbuck Etnertainment: Mental Note avoid this companys releases.
Some people are like slinkies, they dont really have a purpose, but they still bring a smile to your face when you push them down the stairs.
True, on the other hand some of my friends have lost a fortune on stocks and they did not have Funcom stocks.
The stockmarket is falling very badly right now, that AoC didn't get a several million player game like some hope sure didn't help but check the other game companys stocks, hell, check any stocks right now.
The stockmarket started go down this summer and FC stocks started falling after release bacause many invester saw the game, it didn't have the same polish as wow, and frankly I don't know why they didn't wait a few months to release it, they kinda shot themselves in the foot with that.
On the other hand am I intrested to hear what happened to EA/Mythic stocks since WARs release...
http://www.mmorpg.com/discussion2.cfm?thread=185097&bhcp=1 another insteresting take on the profit model for a pay to play game.
Some people are like slinkies, they dont really have a purpose, but they still bring a smile to your face when you push them down the stairs.
The reason the stock does not do better then and now is a piss poor product and the folks who made it also know it. So do most stockholders, the iceing on the cake was when a top exect dump around 27% of his stock.
MAGA
While this is a little off-topic, I think its interesting. Below is a take from a an article I was just reading
If you want a very clear comparison between subscription and other models for MMOs in the western market, look no farther than the NCSoft Quarterly Report. What do you think made NCSoft more money? 137,000 subscribers for City of Heroes/Villains, or 5.4 million users for Guild Wars? It turns out CoH made them $5.5 million this quarter, while Guild Wars made them $4.9 million. To make as much money with the Guild Wars model as with the City of Heroes model, you have to have more than 50x as many users, which means 50x the marketing, 50x the distribution costs, and 50x the support. This is not the way to make money in the Western market.
But again it seems to me that this supports my original statement : Subscriptions = CHA CHING$. With out them, you have no value.
You can read the whole article here: http://doublebuffered.com/2008/08/24/why-subscription-based-mmos-make-sense/
Some people are like slinkies, they dont really have a purpose, but they still bring a smile to your face when you push them down the stairs.
Nothing inspires confidence like the CEO cashing out. Indeed. Agreed.
Some people are like slinkies, they dont really have a purpose, but they still bring a smile to your face when you push them down the stairs.
That's called cashing in, it doesn't mean much. Lot's of company share holders do this, especially after cashing in on a huge profit (800K+ box sales). The only thing important is investor confidence, which is low across the board right now( in the WORLD market). Hard to to gauge any companies growth or lack there of.
Who are you comparing their stocks against is another question to be answered? To look at the competition you would have to look for companies operating two MMO's and a few old single player (adventure games), after a major release. That's where you'll find a trend to follow and gauge. Looking at the stocks for EA, Sony or Blizzards parent is a horrible comparison, and pretty much laughable.They're in a whole different ballpark.
For every minute you are angry , you lose 60 seconds of happiness."-Emerson
Ahh cool, thanks for the replies, seems to make sense now. Assuming funcom may go under, its not wise to invest in them right now. But I've noticed that EA is pretty low, along with activision blizzard. Would it be a good time to buy up on these stocks knowing that they will eventually go up? I don't see EA and Blizzard going under anytime soon.
Im not sure buying any gaming company would be a smart idea. I would look to the tech sector and pharma and some other areas for bargains right now.
Some people are like slinkies, they dont really have a purpose, but they still bring a smile to your face when you push them down the stairs.
Im not sure buying any gaming company would be a smart idea. I would look to the tech sector and pharma and some other areas for bargains right now.
I wouldn't go tech at all right now TBH, there's been a huge drop across the board even google is posting losses 37%.
For every minute you are angry , you lose 60 seconds of happiness."-Emerson
Seeing the based subscription falling from a possible 800k(estimated sales) to 400k, is also pointing to a decrease in profit, so stock change hands and price is adjested accordingly.
Add to this the world economic situation, check Dow Jones, read about it and then check again, you'll see that tons of companies are in the same boat.
No FUNCOM doesn't have less money, those stocks were issued almost 2 years ago, they already sold them and got their money.What it means though is that if they need more money, let's they want to start a new project and need financing, because of the low value right now each new stock issued would be so low they would have to issue a whole lot more and lose company control eventually.
Another problem which is encounter would be a situation where the company would have to borrow from the bank(loan).The bank would loan the money accordingly to the company asset and stock value.
So no, FUNCOM is not going under whether you like it or not, mmo is a slow pace industry and a company can feed from the same product for some time.We're not talking about movies, or your standard off the shelf videogame which produce 3 months revenues.
If I were you I'd be much more worried about your next mortgage or creditcard, because those will suffer much more from world wide financial dip we see right now.
GM stock went under $4.76 lowest in 50 years...Gee do you guys read antyhing else than mmo forums?
Asking questions about the stock market is ok, but it's insanity to ask someone about a particular stock.
The market is crazy right now, which means even if the fundamentals of a stock are really good, the stock could get trashed for no reason. Not the best time for a new investor to get started.
Long story short: The game sucked and the stock tanked.