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Cool, thank you. I did and this seems to put the price drop into a completely different perspective.

What acts of pure intelligence caused the 1994, 2001, and 2008 stock drops.

Ironically these are all separated by 7 years each so we are dropping in on the fourth 7 year span.

 azreal13 wrote:
Perhaps they need a few of these?



Actually, I intended this to be a bit facetious, but honestly? Thinking about it, it wouldn't be the worst idea!

I know this is a half joke from you, but I'll give you 3 main reason why this would be an AWFUL idea...

1) too easy to steal with them without proper supervision, you can work out similar weighing products, and scan the cheaper product and just bag the more expensive product.

2) Have you seen how awful these things are maintenance wise? They need a full time member of staff to keep running which brings me onto point 3...

3) Have you seen people trying to use these things? You need a full time member of staff to ensure it is idiot proof....

 BunkerBob wrote:
What acts of pure intelligence caused the 1994, 2001, and 2008 stock drops.

Ironically these are all separated by 7 years each so we are dropping in on the fourth 7 year span.

You also missed 1987.. That was a doozy.. They all coincide with downturns on the S&P 500 too..hmm

It's a combination of the business cycle and people being emotional with their money.

 BunkerBob wrote:
What acts of pure intelligence caused the 1994, 2001, and 2008 stock drops.

Ironically these are all separated by 7 years each so we are dropping in on the fourth 7 year span.

1994 wasnt a drop. That was shortly after it was listed, and was going up from the IPO.

Publicly traded stocks can maintain value in a couple of ways. One is to actually increase the value of the company. Over the last 20 years, GW hasnt done much in that regard. The business hasnt diversified much at all. Even if you were to come the assets on their balance sheets from the late 1990s to now, it is a change in line with inflation. They have managed to increase liabilities substantially though. A lot of old people will be cashing out as pensioners in a few years...something which GW will be on the hook for in some degree.

The other big way is through dividend payouts. That has been GWs method since day one. When they cant pay the dividend, investors leave. There are plenty of companies which pay dividends, and when you consider that if you had bought stock in the late 1990s, now 15 years later, it would be worth the same or less than when you bought it...there is little reason to stick around.

The people who think that GWs IP is worth significant amounts of money have missed the boat on the broader IP market. When Disney paid $4.5 billion to buy Marvel in 2009, they had already made nearly $8 billion on the current run of Marvel movies. GWs licensing deals will have been lucky to have taken in a couple hundred million dollars. The IP just is not that valuable.

TomKirby
Executive Chairman of the Board, Acting Chief Executive Officer
378.00k GBP
62
Mr. Tom H. F. Kirby serves as Executive Chairman of the Board, Acting Chief Executive Officer of Games Workshop Group Plc. He has been appointed as Acting Chief Executive Officer of the Company effective January 18, 2013. He joined Games Workshop in April 1986 as general manager and led the management buy-out in December 1991, becoming chief executive at that time. Between 1998 and 2000 he took on the role of non-executive chairman, returning to the role of chief executive in September 2000. He now performs the role of chairman following the appointment of Mark Wells as chief executive in December 2007. Prior to joining Games Workshop, Tom worked for six years for a distributor of fantasy games in the UK and was previously an Inspector of Taxes.

Not really pertinent to share price, but I've just discovered a way to save GW almost 400K a year!

dereksatkinson wrote:

 BunkerBob wrote:
What acts of pure intelligence caused the 1994, 2001, and 2008 stock drops.

Ironically these are all separated by 7 years each so we are dropping in on the fourth 7 year span.

You also missed 1987.. That was a doozy.. They all coincide with downturns on the S&P 500 too..hmm

It's a combination of the business cycle and people being emotional with their money.

Ummm...1987...if you want to dazzle with insights, you should at least know it was privately held till it was bought from Bryan Ansell in 1994 and listed in the fall of that year.

One thing that GW is right about is that sales in these sorts of things tend not to be that closely tied to the broader economy. They are large time sinks and can be replayed over and over. The customer who buy these tend to buy when times are good, but they also buy when times are bad too. Sort of like sales of alcohol, only slightly less sad.

The 1997 drop was tied to lack of dividends largely attributed to games like Magic the Gathering out competing GW for the same dollar.

The 2005 drop is often pointed out as the LotR bubble, but most of that had already died off by the time the trilogy came out on DVD in 2006. While it was a bubble, most the problems with profits rest squarely on management not being able to manage and over extending.

 .Mikes. wrote:


This is interesting. I don't suppose anyone has a similar graph to show shareprices over the past year or five years have they?

They look roughly where they were 2 years ago, only trending down instead of up from the looks of this;

http://uk.finance.yahoo.com/echarts?s=GAW.L#symbol=GAW.L;range=5y

Looking at that "max" chart, it looks like there will be several more corrections forthcoming before it finally starts leveling out and growing - probably dipping down below 400 over the next two years before starting to climb again. Just a guess.

 Sean_OBrien wrote:

dereksatkinson wrote:

 BunkerBob wrote:
What acts of pure intelligence caused the 1994, 2001, and 2008 stock drops.

Ironically these are all separated by 7 years each so we are dropping in on the fourth 7 year span.

You also missed 1987.. That was a doozy.. They all coincide with downturns on the S&P 500 too..hmm

It's a combination of the business cycle and people being emotional with their money.

Ummm...1987...if you want to dazzle with insights, you should at least know it was privately held till it was bought from Bryan Ansell in 1994 and listed in the fall of that year.

The S&P 500 was around in 1987.. It's moving with the S&P 500. Or the Russell 2000. take your pick. Either way.. It's funny you picked up on something I pointed out in previous threads.

dereksatkinson wrote:

 Sean_OBrien wrote:

dereksatkinson wrote:

 BunkerBob wrote:
What acts of pure intelligence caused the 1994, 2001, and 2008 stock drops.

Ironically these are all separated by 7 years each so we are dropping in on the fourth 7 year span.

You also missed 1987.. That was a doozy.. They all coincide with downturns on the S&P 500 too..hmm

It's a combination of the business cycle and people being emotional with their money.

Ummm...1987...if you want to dazzle with insights, you should at least know it was privately held till it was bought from Bryan Ansell in 1994 and listed in the fall of that year.

The S&P 500 was around in 1987.. It's moving with the S&P 500. Or the Russell 2000. take your pick. Either way.. It's funny you picked up on something I pointed out in previous threads.

The S&P 500 was around in 1987, but GW PLC was not, since the company only went public in 1994, so I have no idea how you're saying that their stock dropped in 1987...

PhantomViper wrote:

dereksatkinson wrote:

 Sean_OBrien wrote:

dereksatkinson wrote:

 BunkerBob wrote:
What acts of pure intelligence caused the 1994, 2001, and 2008 stock drops.

Ironically these are all separated by 7 years each so we are dropping in on the fourth 7 year span.

You also missed 1987.. That was a doozy.. They all coincide with downturns on the S&P 500 too..hmm

It's a combination of the business cycle and people being emotional with their money.

Ummm...1987...if you want to dazzle with insights, you should at least know it was privately held till it was bought from Bryan Ansell in 1994 and listed in the fall of that year.

The S&P 500 was around in 1987.. It's moving with the S&P 500. Or the Russell 2000. take your pick. Either way.. It's funny you picked up on something I pointed out in previous threads.

The S&P 500 was around in 1987, but GW PLC was not, since the company only went public in 1994, so I have no idea how you're saying that their stock dropped in 1987...

I suspect what he's arguing is that the market goes in cycles, and that the current GW drop off is just a symptom of that, as he has always been arguing this.

dereksatkinson wrote:

PhantomViper wrote:
And yet you are forgetting to account the decrease in sales, the decrease in profits and especially the lack of dividends in your explanations of why the stock plummeted and are instead hand waving it all away as a result of a weakening economy. And you still haven't explained how that same weakening economy (that actually isn't weakening, all economic indicators in Europe are rising), doesn't also have the same impact on GW's main competitors, on KS or even on the tabletop gaming industry at large since all of those have reported growth...

At this point I wouldn't trust you to manage my sons allowance, let alone any type of investment fund.

I'm giving reasons for the sales slump that actually go inline with the numbers we are seeing. It's not something unique to GW and I have no idea where you are getting the idea Europe is improving. You guys are having bank failures and bailouts left and right. Oh the government numbers right... We will see how long this charade lasts.

2012 called, they want their financial analysis back... You do realise that close to 2 years have passed since that went on, right?

Also, you still haven't explained what sales slump is that that only seems to affect GW but none of its major competitors...

Oh, and don't forget the important effects of the solar bursts on the markets, totally more important than Kirby's decisions

Not really wanting to take issue with kroot's schadenfreude, but it's interesting to compare GW with another company whose name is often linked with theirs, namely Hasbro.

Hasrbo's shares are in red.

Which is all well and good, until you realise that the redline is showing a company who's shares are valued at ~6x the price of GW's and would be near impossible for a company valued in the billions to grow at the same rate.

EDIT And let's face it, at this point in time, they're not that far apart, it's just GW took a more meandering route on the way.

The cyclical argument definitely has merit in that when liquidity dries up a bit it's often the small stocks and riskier stocks that people pull out of first. News hits the street and while it's bad news, the market reacts more quickly and rapidly than they would if the general sentiment is that money is free flowing.

During a good bull run, a company can have some bad results and the worst that will happen is that it drops a bit and rebounds or just stays flat.

When investor sentiment as a whole is changing and there's liquidity issues caused by larger economic factors, people take the exact same bad news that would have done nothing and sell off their stocks in that company.

Make no mistake, GW's bad performance caused their share price to drop, but investors only allowed it to happen because of larger issues. You need to remember that people can be dumb and pay millions and millions for stocks for companies with no revenues and no hope of profits like they did in 1999 if the company claimed to be in the tech industry.

I think the share price drop obviously has everything to do with the drop in profits and GW not paying a dividend.

The reasons for this drop in profits are quite obvious. People obviously have a lot of problems with the business practices of games workshop and are buying other companies products or not at all. I don;t think you can blame the GFC on the drop in profits. They have only occurred in the last 2 years. The GFC was in 2007-2008. Anyway people on the doll have more time for painting warhammer not less .

Every time I decide I want to actually buy something from them or start a new army they annoy me. Wanted to Start Bretonnian then discover that you can no longer buy the Trebuchet. So no Bretonnian splurge. It's like the whole finecast debacle didn't work out for them (how did a 300 million pound company manage that one? ) , so they've just put their hands up in the air and said "we don't do metal anymore, and finecast isn't selling so we don't do that anymore, so you'll have to just buy plastic ultrasmurfs and if you don't want to then f off.

P.S. Isn't that the whole idea of forge world, to make products like the Trebuchet?

P.S. What is this Kirby blokes background anyway? Does he actually have any personal interest in modeling/war gaming?

Kirby has been with the company a long time and bought it from Bryan Ansell who had his faults but seemed to show more genuine enthusiasm for the games, if all the various interviews with those involved in the early years of GW are to be believed. Kirby is quoted as saying he hated fantasy and his favourite author was Jane Austen.

 Howard A Treesong wrote:
Kirby has been with the company a long time and bought it from Bryan Ansell who had his faults but seemed to show more genuine enthusiasm for the games, if all the various interviews with those involved in the early years of GW are to be believed. Kirby is quoted as saying he hated fantasy and his favourite author was Jane Austen.

http://investor.games-workshop.com/the-board-of-directors/


Do any of them have an interest in wargaming/modeling?


Remember what happened when apple replaced Steve Jobs with John Sculley, someone from marketing who didn't know a thing about computers...

 Howard A Treesong wrote:
Kirby is quoted as saying he hated fantasy and his favourite author was Jane Austen.

Guess that explains why Kirby's decisions show absolutely no fantasy and imagination

Is switching to one man stores a double edged sword with regard to saving money? There has been a few times I've wanted modelling material and been put off from walking to my local store due to it's limited opening times. I wonder how many other casual gamer's have experienced the same thing and then gone to another source.

 Wolfstan wrote:
Is switching to one man stores a double edged sword with regard to saving money? There has been a few times I've wanted modelling material and been put off from walking to my local store due to it's limited opening times. I wonder how many other casual gamers have experienced the same thing and then gone to another source.

Very, yes.
I know most of my local GWs (over a large area) are closed on Monday and Tuesday. So, I only every try to visit on other days.
But, if Tuesday is the only day I get into town, as used to be the case, there's no way I'm getting to visit an open store.

 Skinnereal wrote:

 Wolfstan wrote:
Is switching to one man stores a double edged sword with regard to saving money? There has been a few times I've wanted modelling material and been put off from walking to my local store due to it's limited opening times. I wonder how many other casual gamers have experienced the same thing and then gone to another source.

Very, yes.
I know most of my local GWs (over a large area) are closed on Monday and Tuesday. So, I only every try to visit on other days.
But, if Tuesday is the only day I get into town, as used to be the case, there's no way I'm getting to visit an open store.

Yeah this; no end of times I've wanted to get something on a Monday/Tuesday and couldnt so ordered it online. Another common problem is the un-regular lunch hour that my local store has had for the passed year; I could go down at any time in the afternoon and atleast half of my visits were met with a 'gone to lunch back at xx:xx' sign.
They are actually the only shop in the whole town that close for lunch! (I guess being the only shop that doesnt have another staff member to swap break times with). Its possibly the most flawed retail business plan I've ever seen coming from such a large company that clearly can afford the staff but is being greedy to protect their huge margins?

Now we dont know their margins precisely; but judging them from the metal/finecast thing - metal was too pricy so they swapped to finecast, but charged us MORE for the cheaper to make products. Thus pushing their ever larger margins even higher doubly so at the same time.
Now theyre axing that too, presumably because plastic is even cheaper. The more costly tooling is presumably irrelevant because of sales figures; Seems obvious that the plastic kits outsell all others by far and so cover their own higher initial investment easily. The more they sell the cheaper each one actually gets for them as its dirt cheap to run off more, and the pricey design/tooling stage is done. So the margin just grows and grows the longer they can keep a kit viable and selling. - all these really really old kits still on the shelves shouldve already covered their own design and tooling costs many times over and a sale of one of those carries much larger margins for the company. I'd expect any company to only replace them when sales have dropped off to a predetermined cut off point. but this is GW and they shape their own sales figures with dodgey rules (whether knowingly or not). They could easily up sales across the board by making every unit viable in the game and encourage these kits that carry higher profit for them to still sell.

We don't know their margins on a product by product basis, but we do get how much money they took in and how much making the product they sold cost them to produce from their financial reports, so from those two figures, we can reasonably surmise that their gross profit on product sold is ~70-75% as an average.

 azreal13 wrote:
We don't know their margins on a product by product basis, but we do get how much money they took in and how much making the product they sold cost them to produce from their financial reports, so from those two figures, we can reasonably surmise that their gross profit on product sold is ~70-75% as an average.

Oh for sure.. total speculation on my part, sorry if that wasnt clear

I just used logic to assume that once a product has sold enough to cover its innitial investment, the margin it earns per sale can only rise (unless ofcourse the dirt cheap styrene plastic becomes exorbitant ), so the older the kit, the more potential for higher margins? (assuming it sold enough to cover itself upon release; as I'm sure is planned for by GW)

Yep, that's logical, especially as they now include production and development costs in their 'cost of sales' figure (it was accounted for separately until the last annual report I believe) so that somewhat neatly removes the costs of tooling, sculpting etc for a kit once the next financial year rolls around,while retaining the income that kit has generated.

Just as an aside, I was watching Ewan Davies' (Dragons Den UK presenter) BBC News/Radio 4 chat show the other evening, and a rather interesting fact came up from one of his guests.

Discussing MBAs, and their emphasis on case studies, one chap mentioned how 5 different accountants prepared a financial report of a company based on their figures at a fixed point in time, 4 reported a company that was in a sufficiently strong financial position to be a solid lending proposition (the 5th disagreeing.)

The figures they based their reports on were taken 24 hours before the company in question went into liquidation.

This really brought home to me something I thought I already understood, which is financial reports can be deeply manipulated to present whatever story you want - makes one consider how near the reality of the situation these interim figures really are....

 azreal13 wrote:
Yep, that's logical, especially as they now include production and development costs in their 'cost of sales' figure (it was accounted for separately until the last annual report I believe) so that somewhat neatly removes the costs of tooling, sculpting etc for a kit once the next financial year rolls around,while retaining the income that kit has generated.

Accounting rules have changed recently, so that rather than claiming capital depreciation - a percentage of the cost of equipment - every year, for many items you now claim the whole amount in one year, so that would make sense.

HairySticks wrote:
...
Now theyre axing that too, presumably because plastic is even cheaper. The more costly tooling is presumably irrelevant because of sales figures; Seems obvious that the plastic kits outsell all others by far and so cover their own higher initial investment easily. The more they sell the cheaper each one actually gets for them as its dirt cheap to run off more, and the pricey design/tooling stage is done. So the margin just grows and grows the longer they can keep a kit viable and selling. - all these really really old kits still on the shelves shouldve already covered their own design and tooling costs many times over...

All of this logic completely omits overheads. Product will take up shelf space in GW stores that cost a huge amount to run (of which more in a mo); the company itself will have massive overheads, including rent, staff, you name it. So simply talking about the costs of plastic and tooling alone, doesn't tell the full story.


A second-hand acquaintance of mine set up a fairly large book chain, whihc was ulitmately bought by a multiple. The multiple made a few bad deals and had to sell all of its book shops; the friend wanted to buy back his own, old chain. His decision, ultimately, was not about selling books - it was all about good leases and bad leases. He reckoned his old business was now no longer worth buying, on the basis of the leases.

As we know, GW has a huge number of retail outlets - these are a massive cost sink, and whether they're on good leases or bad leases would, for instance, be a crucial question for any prospective purchaser.

How long have they been saying metal prices have been rising? I worked for them at the end of 2004 and got around £150 (retail value) of metal Dwarves for about £35. I can't imagine that they were selling figures to staff at cost, which would mean the actual costs involved were less. That was 2004 though.

RE: Leases.

Any new owner wouldn't necessarily be beholden to any agreement signed by GW (just as a landlord wouldn't necessarily be obliged to honour it either)

Would very much depend on the terms and manner of takeover, but a new owner could, potentially, discard the whole retail chain overnight.