Forum adverts like this one are shown to any user who is not logged in. Join us by filling out a tiny 3 field form and you will get your own, free, dakka user account which gives a good range of benefits to you: No adverts like this in the forums anymore. Times and dates in your local timezone. Full tracking of what you have read so you can skip to your first unread post, easily see what has changed since you last logged in, and easily see what is new at a glance. Email notifications for threads you want to watch closely. Being a part of the oldest wargaming community on the net. If you are already a member then feel free to login now.

GW has another financial pattern:
When MB made advertising for GW games (Hero Quest, Space Crusade), GW couldn't react that fast to counter the huge interest in their products.
When LOTR and DeAgostini made advertising for GW games, GW was prepared and could cancel contracts, so that the big sales happily ended after 2-3 years. Now GW is eager to never let anyone make advertising for GW again, sueing every tiny attempt. The result is a comfortable flat line or decline in revenue development.

 Kroothawk wrote:
Well, if you think, Cyprus and Greece are the markets that decide GW's destiny then we don't have to talk any further.

Umm.. no. The fact that Europe is a complete clusterf*** that isn't getting better is probably going to have an impact on sales. Cyprus and Greece are indicators of just that. Unless you think that those 22% youth unemployment number has no bearings on the consumption of GW products.

 BunkerBob wrote:
I am still amused GW has a 7 year pattern of loose all value and then rapidly recoup it. I really want to see this happen again.

This isn't unique to games workshop. Cycles in the stock market are pretty well documented.



As for GW's dismal returns..

From 1983-2007 the Russell 3000 (98% of US stock liquidity) gained 900% yet..

39% of stocks had a negative return
18.5% lost 75% of their value or more
75% of all 6000 stocks that were added/subbed from the index over that time had a ZERO % return.

So only 25% of all those names participated. Those that did, made incredible returns.


Automatically Appended Next Post:

 pretre wrote:
Just popped in to see if it was the world against derek still. Leaving satisfied.

I can't help it. If I see something that ridiculous being portrayed as fact, I have to say something. It's my weakness.

@dereksatkinson

I have noticed that you like to throw up lots of charts and graphs which appear to be of both dubious origin and unprofessional layout. For example, I recall a graph you posted some while ago with an artistic background depicting an eagle and an american flag or something. This latest graph is along the same lines and does not even contain or reference any sort of quantitative data.

Note that I am not making any material argument about the specific content of your charts and graphs, as I am not really knowledgeable enough to make a substantive appraisal of the data without an amount of effort that I do not wish to invest.

That said, what I am pointing out is that purely on a qualitative basis, professionals by and large don't make graphs and charts like the ones you have been posting. Anyone can cook up a pretty-looking chart filled with meaningless or biased data, and it strikes me that the type of 'hard' data that you have been posting has had a presentation style rather consistent with charts prepared for consumption by the general public with the intention of making a particular rhetorical point and/or pushing a particular point of view. Such 'data' tends to be highly controversial at best and is usually severely biased.

Taken together with the content of your posts, it seems that you have a very particular view of the economy and the stock market which you personally feel is both a form of special knowledge known to a minority of 'enlightened' individuals, and prophetically accurate. It may be that you know something special that we, the general public, are all too stupid to know, grasp, realize, or believe; but more often than not folks like you turn out to be self-deluded wannabe demagogues with a personal agenda.

So, please forgive me for presuming that you are full of without making the effort to substantively criticize the data underlying your opinions, which I am sure you will take to be evidence that I am an ignorant fool unwilling to question some sort of established authority, such as the government. Much as you are entitled to your opinions, I feel it would be a waste of my time to engage in any sort of substantive discussion with you, and I think you would feel the same. Nevertheless, I thought I would share my overall opinion about all of this as opposed to merely lurking.

"What have you done when you have bested a fool?" - Mattie Ross

I did think that last chart was pretty dodgy looking, though, to be fair, it was the kind of horse-gak image they filled up my last 'management-speak' course with.

Unless the share prices jumps again in either direction I think this topic is a bit stale. Short of some disaster the share price will likely remain pretty flat until the next investors report in about June.

weeble1000 wrote:
This latest graph is along the same lines and does not even contain or reference any sort of quantitative data.

You mean the graph that's supposed to show general shareholder mood/reaction to market changes? That's not tied to any specific stock? That doesn't need a reference because it is just a teaching tool?

Not saying your complaints about his other graphs aren't valid, just that this particular graph is not what you might think.

Edit: Unless you were targeting it because of this sentence precluding it

This isn't unique to games workshop. Cycles in the stock market are pretty well documented.

 Gentleman_Jellyfish wrote:

weeble1000 wrote:
This latest graph is along the same lines and does not even contain or reference any sort of quantitative data.

You mean the graph that's supposed to show general shareholder mood/reaction to market changes? That's not tied to any specific stock? That doesn't need a reference because it is just a teaching tool?

Not saying your complaints about his other graphs aren't valid, just that this particular graph is not what you might think.

Spoiler:

Not a real graph

It is demonstrative, sure, but it should be based on some kind of quantitative data, shouldn't it? Otherwise how would you know that at a certain point in the downtrend of the market most investors feel "desperation" or "panic?" The chart is purporting to demonstrate highly relevant behavioral patterns that have been the subject of exhaustive quantitative and qualitative research. How the stock market behaves and why is not something that we really understand terribly concretely, though there are plenty of theories.

I don't know much about the stock market, but I do perform behavioral research for a living, which is why this chart prompted me to finally say something.

My brother-in-law writes algorithms used in high frequency trading for a living, which I don't understand much at all, but I do understand that it is not merely about speed, but also predictability. There are many facets of stock market behavior that just aren't predictable to a high degree of certainty today. And he posted that chart like it was gospel. 'Buy after the suckers have panicked and are despondent'. Great, how much did it cost you to attend that seminar? Oh, you get extra points if you bring a friend?

dereksatkinson wrote:
Umm.. no. The fact that Europe is a complete clusterf*** that isn't getting better is probably going to have an impact on sales. Cyprus and Greece are indicators of just that. Unless you think that those 22% youth unemployment number has no bearings on the consumption of GW products.

Germany has a youth unemployment of 7.4% last December, that's about half the US rate. (x)

And you still think that Cyprus and Greece are the relevant markets for GW in Europe.

dereksatkinson wrote:

 BunkerBob wrote:
I am still amused GW has a 7 year pattern of loose all value and then rapidly recoup it. I really want to see this happen again.

This isn't unique to games workshop. Cycles in the stock market are pretty well documented.

GW clearly has no 7 year cycle. Not even for people with great imagination. They just have a bubble where a movie and DeAgostini made successful marketing, filling GW stores, which GW answered with cancelling the cooperation with DeAgostini to stop this unwanted revenue. Since then ... nothing. In a growing market.

If I see something that ridiculous being portrayed as fact, I have to say something. It's my weakness.

Funny that you say that, wanted to say the same.

(x) (How does GW answer this opportunity? They fire the German translation team, erase German product names from the packaging, make a third of the publications including all digital products English only, fire the German HQ and transfer everything to a room in Nottingham, that doesn't even know how to properly write a German address on the bill.)

 Kroothawk wrote:

dereksatkinson wrote:
Umm.. no. The fact that Europe is a complete clusterf*** that isn't getting better is probably going to have an impact on sales. Cyprus and Greece are indicators of just that. Unless you think that those 22% youth unemployment number has no bearings on the consumption of GW products.

Germany has a youth unemployment of 7.4% last December, that's about half the US rate. (x)

And you still think that Cyprus and Greece are the relevant markets for GW in Europe.

Not only that, but he also seems to think that the economy of places like Greece and Cyprus are somehow representative for the entire European economy. As if the majority of European countries are governed in even the remotely same way.

Derek, you have a slightly myopic view of European countries.
Just to make sure.......you are aware that Europe isn't even remotely comparable to the US in terms of organization, right? You know we are a bunch of separate countries, with separate laws, separate cultures and separate ways of running our countries, right?

EDIT. Denmark has 5.6% unemployment as of January 30th. this year.



....

America and England being GW main markets, so there youth unemployment figures could have been relevant.
Greece and Cyprus, not really.

And as regards euro banks and economies, the likes of J P Morgan and others are in a far worse state.

azreal13 wrote:

If they buy the going concern, yes.

This isn't the only way a new owner could acquire GW assets though.

dereksatkinson wrote:

 azreal13 wrote:
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.

Unless GW actually goes bankrupt.. as in actually files for bankruptcy.. They will be beholden to any agreements. This is a public company.. Not the wild west.

I believe I already covered that?

Or is buying assets from a bankrupt company not covered under "not the only way a new owner could acquire GW assets?"

Latest uk stats (to December), puts unemployment at 7.2%, with Youth unemployment for those not in full time education at 18%

18% sounds high, until you look at the history - its fluctuated between approx 15% and 23% since 1992, peaking at 23% in 2008, so 18% is pretty much average for the last 20+ years.

Stats are available from the House of Commons Library (online).

 Eggs wrote:
Latest uk stats (to December), puts unemployment at 7.2%, with Youth unemployment for those not in full time education at 18%

18% sounds high, until you look at the history - its fluctuated between approx 15% and 23% since 1992, peaking at 23% in 2008, so 18% is pretty much average for the last 20+ years.

Stats are available from the House of Commons Library (online).

Which is more relevant than Greece or Cyprus, could ever be.

weeble1000 wrote:
I don't know much about the stock market, but I do perform behavioral research for a living, which is why this chart prompted me to finally say something.

My brother-in-law writes algorithms used in high frequency trading for a living, which I don't understand much at all, but I do understand that it is not merely about speed, but also predictability. There are many facets of stock market behavior that just aren't predictable to a high degree of certainty today. And he posted that chart like it was gospel. 'Buy after the suckers have panicked and are despondent'. Great, how much did it cost you to attend that seminar? Oh, you get extra points if you bring a friend?

The chart I posted is actually a teaching tool for a VERY basic concept of technical analysis which is based around the concept of behavioral economics. It was meant to be conceptual and explain how human emotions can lead to bubbles and capitulation behavior(throwing the baby out with the bathwater). Technical indicators are used by all the major brokerage houses and are included in their research. If you are wanting to get into more detail about those kinds of things, go here..
http://en.wikipedia.org/wiki/Technical_analysis

Even Warren Buffet was quoting technical analysis during the 2008 crash so maybe you could go to the Brookshire Hathaway meeting and ask him about getting the extra points for bringing a friend..



Automatically Appended Next Post:

 Eggs wrote:
Latest uk stats (to December), puts unemployment at 7.2%, with Youth unemployment for those not in full time education at 18%

18% sounds high, until you look at the history - its fluctuated between approx 15% and 23% since 1992, peaking at 23% in 2008, so 18% is pretty much average for the last 20+ years.

15-23% is very high and suggests structural problems with the UK labor markets.

That being said, my comments were directed at Europe as a whole which includes Spain, France, Italy and Greece. I'd love to see you argue that 50% youth unemployment in some of those countries isn't bad.




Automatically Appended Next Post:

 loki old fart wrote:
And as regards euro banks and economies, the likes of J P Morgan and others are in a far worse state.

No disagreements there.. You have an estimated $300 trillion in derivative exposure on $10 trillion in banking assets. 30:1 leverage means a 3% move against the bank wipes out all equity. Which is why so many banks are failing and you are seeing central banks try to buy illiquid mortgage backed securities to repair bank balance sheets globally.


Automatically Appended Next Post:

Steelmage99 wrote:
Just to make sure.......you are aware that Europe isn't even remotely comparable to the US in terms of organization, right? You know we are a bunch of separate countries, with separate laws, separate cultures and separate ways of running our countries, right?

EDIT. Denmark has 5.6% unemployment as of January 30th. this year.....

Do you happen to remember some of the words being tossed around a couple summers ago before the ECB started buying bonds like crazy? Does the word "Contagion" ring a bell?

The reason that The EU authorities were worried about "contagion" is because your banks own sovereign debt of neighboring nations. That hasn't changed.


Automatically Appended Next Post:

 azreal13 wrote:
Or is buying assets from a bankrupt company not covered under "not the only way a new owner could acquire GW assets?"

I didn't think anyone was actually suggesting that this company was going to suddenly go bankrupt. I don't see how that could happen in the short run and i'm as bearish as it gets on the economy.

@derek, I'm not arguing anything. Some mentioned that uk stats might be more relevant than Cyprus, so I provided them. Are you aiming to be the most abrasive man on the internet? Seems like you'd argue with your own shadow.

Well, most of us here understand, that the GW share price is influenced more by Tom Kirby's decisions of the last decade than by unempoyed teens in Cyprus.

And I ask the mods to keep certain persons from spamming this thread with stupid off topic talk.

dereksatkinson wrote:

 azreal13 wrote:
Or is buying assets from a bankrupt company not covered under "not the only way a new owner could acquire GW assets?"

I didn't think anyone was actually suggesting that this company was going to suddenly go bankrupt. I don't see how that could happen in the short run and i'm as bearish as it gets on the economy.

And I don't believe that likelihood of it occurring was in any way conditional to my point? I wasn't saying I believe it will happen, merely that it could.

I remember how very fast the collapse of TSR seemed from the outside, and learning how slow and inevitable it really was once the WotC buyout was explained.

GW has made some of those same mistakes, avoided others, and made new ones....

How solid GW looks as a company from the outside might or might not be a comforting illusion.

I suspect that there is indeed some smoke and mirrors going on, but there is still a hope that the core is still strong enough to survive some of the recent decisions.

The Auld Grump

 TheAuldGrump wrote:
I remember how very fast the collapse of TSR seemed from the outside, and learning how slow and inevitable it really was once the WotC buyout was explained.

GW has made some of those same mistakes, avoided others, and made new ones....

How solid GW looks as a company from the outside might or might not be a comforting illusion.

I suspect that there is indeed some smoke and mirrors going on, but there is still a hope that the core is still strong enough to survive some of the recent decisions.

The Auld Grump

Something I wrote earlier in the thread...

 azreal13 wrote:
......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.

It is very easy to project the image you want with accounts, even if things are desperate (I don't think they are, but...)

 Kroothawk wrote:
Well, most of us here understand, that the GW share price is influenced more by Tom Kirby's decisions of the last decade than by unempoyed teens in Cyprus.

And I ask the mods to keep certain persons from spamming this thread with stupid off topic talk.

Yes.. let's keep the discussion based purely on bashing GW management and completely ignore outside influences that have time and again proven to be the primary driver of stock prices. Heaven forbid you have someone with actual credentials who is licensed with over a decade of experience chiming in. If you want to keep it strictly about GW's "poor management", then name the thread that.

As it currently stands, no one should be talking about management decisions because the topic of this thread is about the share price. If anything, you should be discussing RSI, MACD and support levels like a trader would. You know, technical analysis. No one in their right mind thinks that management decisions are determining day to day price action. All the decisions management has made is already priced into the stock price. Until GW releases another earnings report or real news, that is the way it's going to be.

dereksatkinson wrote:
If you want to keep it strictly about GW's "poor management", then name the thread that.

I want to avoid getting into a protracted debate with you on the subject, but given your quite vocal disdain for the opinions of everyone here, I have to ask: Do you truly believe that GW's method of doing business is financially healthy in the long term? Do you feel they have taken the correct steps in pursuing litigation such as the Chapterhouse case (including their behavior therein), or the Spots the Space Marine incident? Do you feel that their attitude towards their customers (especially veterans) is promoting growth?

You've spent a good portion of your posts defending the apparent downturn we've seen in GW's finances, so I am honestly curious if you think that they are doing the best they can for the future of the franchise (and ultimately, their business). If not, then how would you measure the effectiveness of their management or the overall effects that management has made on the health of the company and it's product line?

We can use all the fancy graphs we want but we all know that Kirby will screw it up in the end.

 azreal13 wrote:

dereksatkinson wrote:

 azreal13 wrote:
Or is buying assets from a bankrupt company not covered under "not the only way a new owner could acquire GW assets?"

I didn't think anyone was actually suggesting that this company was going to suddenly go bankrupt. I don't see how that could happen in the short run and i'm as bearish as it gets on the economy.

And I don't believe that likelihood of it occurring was in any way conditional to my point? I wasn't saying I believe it will happen, merely that it could.

They said Rome would never fall but it did. The titanic was unsinkable, and we all know how that ended.

dereksatkinson wrote:

As it currently stands, no one should be talking about management decisions because the topic of this thread is about the share price. If anything, you should be discussing RSI, MACD and support levels like a trader would. You know, technical analysis. No one in their right mind thinks that management decisions are determining day to day price action. All the decisions management has made is already priced into the stock price. Until GW releases another earnings report or real news, that is the way it's going to be.

Management decisions effect sale of product, that in turn effects profits. profitability effects share holder confidence, share holder confidence effects share value. cause and effect..

 TheAuldGrump wrote:
I remember how very fast the collapse of TSR seemed from the outside, and learning how slow and inevitable it really was once the WotC buyout was explained.

GW has made some of those same mistakes, avoided others, and made new ones....

How solid GW looks as a company from the outside might or might not be a comforting illusion.

I suspect that there is indeed some smoke and mirrors going on, but there is still a hope that the core is still strong enough to survive some of the recent decisions.

The Auld Grump

That is a damn interesting link you got there Grump, this part especially stood out to me:

In all my research into TSR's business, across all the ledgers, notebooks, computer files, and other sources of data, there was one thing I never found - one gaping hole in the mass of data we had available.

No customer profiling information. No feedback. No surveys. No "voice of the customer". TSR, it seems, knew nothing about the people who kept it alive. The management of the company made decisions based on instinct and gut feelings; not data. They didn't know how to listen - as an institution, listening to customers was considered something that other companies had to do - TSR lead, everyone else followed.

In today's hypercompetitive market, that's an impossible mentality. At Wizards of the Coast, we pay close attention to the voice of the customer. We ask questions. We listen. We react. So, we spent a whole lot of time and money on a variety of surveys and studies to learn about the people who play role playing games. And, at every turn, we learned things that were not only surprising, they flew in the face of all the conventional wisdom we'd absorbed through years of professional game publishing.

We heard some things that are very, very hard for a company to hear. We heard that our customers felt like we didn't trust them. We heard that we produced material they felt was substandard, irrelevant, and broken. We heard that our stories were boring or out of date, or simply uninteresting. We heard the people felt that >we< were irrelevant.

I know now what killed TSR. It wasn't trading card games. It wasn't Dragon Dice. It wasn't the success of other companies. It was a near total inability to listen to its customers, hear what they were saying, and make changes to make those customers happy. TSR died because it was deaf.

That was the primary point of my perceived similarity of the two companies, yes.

And both did a very good job of ignoring that thing called 'the interweb' as a passing fad, instead of as a tool for gaining insight into their markets.

The Auld Grump

 Xca|iber wrote:

dereksatkinson wrote:
If you want to keep it strictly about GW's "poor management", then name the thread that.

I want to avoid getting into a protracted debate with you on the subject, but given your quite vocal disdain for the opinions of everyone here, I have to ask: Do you truly believe that GW's method of doing business is financially healthy in the long term? Do you feel they have taken the correct steps in pursuing litigation such as the Chapterhouse case (including their behavior therein), or the Spots the Space Marine incident? Do you feel that their attitude towards their customers (especially veterans) is promoting growth?

You've spent a good portion of your posts defending the apparent downturn we've seen in GW's finances, so I am honestly curious if you think that they are doing the best they can for the future of the franchise (and ultimately, their business). If not, then how would you measure the effectiveness of their management or the overall effects that management has made on the health of the company and it's product line?

You've got a lot of questions here so i'm going to do my best to answer them all. If I miss one, don't hold it against me.

You are mistaken if you think I has disdain for the opinion of everyone here.. Just people that are making projections based off a single trade print or a snapshot of sales over a single quarter.

I don't particularly like having to constantly update my armies and there are plenty of things I would like to change but I do enjoy the hobby and the game.

Chapterhouse is a local vendor for me (i've moved since the last time i've updated this profile). I've made purchases from him in the past and hope to continue to in the future. I would have preferred if GW didn't go after him but I can understand their desire to protect their intellectual property. IMO though, it wasn't worth doing.

As I stated before, I wouldn't buy GW stock. I think the stock market is currently priced for perfection and if anything goes wrong, you get a blow up. Normally a 10% miss in sales really isn't all that big of a deal. The drop had much more to do with unrealistic expectations than anything else IMO. I previously pointed out that plenty of other retailers had misses and their stock prices had similar reactions. Companies much larger than GW too mind you.

As for management.. I think they took a gak situation and turned around the company. I know there are things I'd prefer as their customer but they need to make money and be creative in doing it. I think introducing new units that are exceptionally high quality and highly detailed is a great way to pull money out of my pocket and they have done that. I do think cutting costs was the right thing to do in this environment. IMO, there GW stores are a complete waste of their money here in the USA. I know it's a bit different over in Europe but the FLGS is where most people play and make their purchases. I also do think GW needs to be more forthcoming with assisting the community in rules discussions. Can I say for certain that it would help them make more money? Nope.. Just my opinion. It's not a fact so I can't portray it as such.

Ultimately though.. I do think that earnings will be the determining factor of the effectiveness of management. Not a single report but the summation of the whole body of work. If I'm seeing consistent growth that is timed like a swiss watch, I know someone is playing with numbers. I'm not seeing that here. I don't see management pulling forward future revenue to make their numbers and meet expectations. That is a 180 from what i've seen in a lot of filings from other retailers this past q4.

dereksatkinson wrote:
You are mistaken if you think I has disdain for the opinion of everyone here.. Just people that are making projections based off a single trade print or a snapshot of sales over a single quarter.

This might be the reason this thread seems to be everyone vs you in places.
We are not basing anything off this and only this report. The last report said flat revenue after adjusting for inflation, so did the one before that and the one before that. We have seen falling sales for YEARS now and been saying that this, exactly what seems to be starting to happen now, would be the outcome if GW didn't do something. People were accusing GW or raising prices and cutting costs to cover falling sales and now GW seem to finally be in a position where they can't do that anymore. That's why people aren't accepting 'yeah but the economy is bad now' as a response. People saw this coming a year or two off.

What he said!

Most people predicted the slow decline. The interesting part is that we now have finally passed the tipping point and the market is reacting to it. And the panic reaction of Tom Kirby (closing all non-UK HQs) shows that he is in principle aware of this problem. No solar burst or astrological constellation can cloud that fact. Esp. as the tabletop market as a whole is growing fast (see e.g. Infinty and kickstarter sales), whatever the situation in Cyprus is currently. And with standard marketing and business decisions, GW could easily grow again, whatever the situation in Cyprus is currently.

 jonolikespie wrote:
. People saw this coming a year or two off.

People saw it coming considerably earlier. The LoTR bubble burst in 2005(?) and things haven't improved for GW since.

A very local sign that GW seems to have pared the business down to the bone as far as store staff is that I passed a store on a Saturday ( yesterday ) in a good location in a busy shopping mall that was closed due to staff holidays .

In the past staff were able to be shifted from other stores to cover , seems there may be no spare capacity for this now