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 Alpharius wrote:
A little more of an attempt to perhaps play a little nicer would be...nice?

Hey, I thought I had been playing nice and had been quite polite despite the desire not too be - what have I done this time?

Ha!

It isn't you - no worries!

Just a general 'play nice' for all involved.

There IS a lot of good info in here after all!

dereksatkinson wrote:

 azreal13 wrote:
Using acronyms without explanation would certainly favour the latter, but not everyone is a natural educator, and as I do think you've got genuine credentials and can offer insights, I decided to offer the benefit of the doubt.

Nope.. i'm not an educator nor a diplomat.

I'm also not really giving a rosy picture of GW's next 9-12 months either.

So using your experience, how do you think this will go. Over the next year.

 loki old fart wrote:
So using your experience, how do you think this will go. Over the next year.

It really does depend... If we can get that monthly RSI down into the low 30s and have a capitulation I think it could back above where it's currently trading inside of 12 months. It could be a slow drip lower that lasts 9 months.. No one really knows and if they are trying to tell you they do, they are lying.

What you want to see is for positive divergences to develop and then an uptrend to form. One where you are getting higher lows and higher highs.

Is that going to happen? Based on how the monthly chart looks, I think there is more downside for the next 9-12 months. That's not to say we wont have bounces (we could easily see one given how oversold the weekly is) but I don't think we start a new uptrend until we see that RSI touch 30 on a monthly. mid cap names tend to do that for some odd reason.

So if you held a gun to my head I'd say we are likely headed potentially as low as the mid 300s. I wouldn't be touching this thing right now from the long or short side though. Not a good trade.

dereksatkinson wrote:

 loki old fart wrote:
So using your experience, how do you think this will go. Over the next year.

It really does depend... If we can get that monthly RSI down into the low 30s and have a capitulation I think it could back above where it's currently trading inside of 12 months. It could be a slow drip lower that lasts 9 months.. No one really knows and if they are trying to tell you they do, they are lying.

What you want to see is for positive divergences to develop and then an uptrend to form. One where you are getting higher lows and higher highs.

Is that going to happen? Based on how the monthly chart looks, I think there is more downside for the next 9-12 months. That's not to say we wont have bounces (we could easily see one given how oversold the weekly is) but I don't think we start a new uptrend until we see that RSI touch 30 on a monthly. mid cap names tend to do that for some odd reason.

So if you held a gun to my head I'd say we are likely headed potentially as low as the mid 300s. I wouldn't be touching this thing right now from the long or short side though. Not a good trade.

So in basic English. Unless some positive news, next 9 to 12 months slow decline. Wouldn't touch their shares with a barge pole

dereksatkinson wrote:

I wouldn't be touching this thing right now from the long or short side though. Not a good trade.

So this begs the question, of course, does GW have the resources and wherewithal to turn this situation around faster?

Assuming for the moment that your analysis is accurate (I have no reason to doubt this), then surely GW has access to the same information. If this is the case, does GW have an opportunity to have this downside last closer to 3-6 months (or less) rather than 9-12 months, or do they simply have to ride out "market forces" with no real control over what happens? More importantly, could (or should) GW have taken steps earlier to leave their company more resistant to this type of downturn? Or is it simply not worth it to invest in practices that aren't focused on direct product growth when the financial world is so cyclical anyway?

The way you discussed RSI and your conclusions about GW's performance therein seems to indicate that businesses might exercise some control over that aspect of their company, so when something like this happens, is it natural (or indeed, wise) to reevaluate one's business model? (i.e., is it more normal to "go with the flow" or "hold against the tide"?)

A normal company that comminicates, would have a better chance of turning around. The next word from GW though wont be until July or August. Silence makes investors nervous on downward slides.

GW management will likely try to accelerate releases even more (not like the previous 7+ months have been lacking) in order to get a profit back to justify something like an iterim dividend report. Barring that, GW will remain silent. With nothing from them, there will be nothing to actually cause a change in direction of stock prices.

The RSI is also somewhat of a limited indicator for low volume stocks like GW. Because of the way it is calculated, you can get back close to 30 after a bit of inactivity. That doesnt mean any real change and institutions often wait for that to happen so they can dump stock on a small upswing as opposed to when the masses panic and sell on the downward slide.

That creates the small upticks followed by large drops I mentioned previously. If a company like Nomad kicks out a chunk of stocks, the result ends up being a few dozen traders following suit and another 20% drop. Panic ensues, and down it goes till no one wants to buy and no one can afford to sell.

 loki old fart wrote:

dereksatkinson wrote:
So if you held a gun to my head I'd say we are likely headed potentially as low as the mid 300s. I wouldn't be touching this thing right now from the long or short side though. Not a good trade.

So in basic English. Unless some positive news, next 9 to 12 months slow decline. Wouldn't touch their shares with a barge pole

That's basically consensus among all people interested in GW's economic future, Harvard Business School or not. Only question was, how much of their infrastructure GW could sell, before the decline became obvious in the annual reports and shareholders became aware. This moment now has come. And good news is, now for the first time the decline is hurting the people responsible for it.

I think this basically boils down to this:

We have a company in GW who supports a luxury item in a niche market that the majority of investors have no idea about. The news out of GW to the investors is the same as the news to the customers, none, meaning investors are purely going off quarterly/bi-annual reports, dividends and stock performance against the market. Looking at the stock price, it basically follows this trend with a huge falloff after the last report and a slow decline, with the next drastic inflection point probably being a large market trend or GWs next report. GW may be able to recall some of their stock, making it more valuable, but I don't think they have the cash to do that. Basically any comments until the next report comes out is speculation.

With that, time to speculate. GW is currently saturating the market with product in order to get revenue up. They are expanding their lead game to allow a larger variety of powerful models to be played and are rumored to be getting ready to release a new edition. They are continuing to sell items at high prices while also cutting back on their retail arm's cost. It appears to me that GW is all-hands on deck to try make the report in July show an increase in revenue and at least no decline in volume. I do not see them making any attempt to change how the interact with customers or independent retailers. I also haven't seen any indication that they are trying to leverage their IP for a new video game, movie or other source to bring in more cash flow. To me, this means they attempting to run the well dry on their current games and squeeze every drop of money out of them they can. I think even if GW makes a short term gain, they will eventually fall even further because people will run out of money or get tired of the steeper treadmill of new product. I guess you could say that the current tactics by GW may provide a short term gain, but will actually result in a accelerated fall due to people getting feed up faster.

BTW, the stock is currently at 493, lower than any other time since Feb 6, 2012 (two year low). Now to get to the 3 year low, it's going to have to drop another 150 points, which on the current linear trend would take 120 days (June 28, 2014). I'd assume the drop off isn't going to be completely linear, which means this time next year will be the best indicator.

I've got it, this is a Kirby private buy out plan!

[straightens crease out of tin foil hat]

 Xca|iber wrote:
So this begs the question, of course, does GW have the resources and wherewithal to turn this situation around faster?

Assuming for the moment that your analysis is accurate (I have no reason to doubt this), then surely GW has access to the same information. If this is the case, does GW have an opportunity to have this downside last closer to 3-6 months (or less) rather than 9-12 months, or do they simply have to ride out "market forces" with no real control over what happens? More importantly, could (or should) GW have taken steps earlier to leave their company more resistant to this type of downturn? Or is it simply not worth it to invest in practices that aren't focused on direct product growth when the financial world is so cyclical anyway?

The way you discussed RSI and your conclusions about GW's performance therein seems to indicate that businesses might exercise some control over that aspect of their company, so when something like this happens, is it natural (or indeed, wise) to reevaluate one's business model? (i.e., is it more normal to "go with the flow" or "hold against the tide"?)

It's not really a function of GW controlling their stock price. Prices fluctuate based on investor sentiment and you can't really control those fluctuations. Investor sentiment goes from optimistic to pessimistic regardless of what management does. The only reason why you'd have management looking at investor sentiment is to time a stock offering or make personal purchases and/or sales. Good management teams will raise money when you are overbought because it doesn't dilute share holders as much. Doing it in the hole is a sign of desperation and results in unnecessary dilution.

Ultimately.. You don't want management thinking about their stock price over the next 9 months. You want them focused on making money.

 Sean_OBrien wrote:
The RSI is also somewhat of a limited indicator for low volume stocks like GW. Because of the way it is calculated, you can get back close to 30 after a bit of inactivity. That doesnt mean any real change and institutions often wait for that to happen so they can dump stock on a small upswing as opposed to when the masses panic and sell on the downward slide.

Well.. a good technician would have seen the H&S bottom and bought the breakout of the neckline back in july of 2009 and definitely would have been gone from the trade or at the very least much smaller in it after we broke the power uptrend line back in december. Mainly because of the obvious divergences. Kind of playing monday morning quarterback by saying that but RSI divergences have worked on this name pretty well.

 Sean_OBrien wrote:
That creates the small upticks followed by large drops I mentioned previously. If a company like Nomad kicks out a chunk of stocks, the result ends up being a few dozen traders following suit and another 20% drop. Panic ensues, and down it goes till no one wants to buy and no one can afford to sell.

I don't think it works like that. If an institutional client is selling, someone else is buying. You don't always know the reason why someone is selling. Sometimes they are selling because they have to and it's not a reflection of their outlook on the company. If a fund is getting redemption requests, they have to sell.

Remember.. these funds are the guys who elected the current management team. They aren't going to dump simply because another fund is dumping. Guys that size would likely call up a few brokers and try to do block sales if they had given up. There isn't sufficient liquidity to sell it directly to the market and if they did, they would get a crap price. If you are seeing a fund sell their position from an Electronic trading platform, they are unsophisticated and/or likely doing it out of fear. You'd want to take the opposite side of that transaction 9 times out of 10.


Automatically Appended Next Post:

 Kroothawk wrote:
That's basically consensus among all people interested in GW's economic future, Harvard Business School or not. Only question was, how much of their infrastructure GW could sell, before the decline became obvious in the annual reports and shareholders became aware. This moment now has come. And good news is, now for the first time the decline is hurting the people responsible for it.

Well.. if they have an asset that is not productive, they should get rid of it and run a leaner company.

If the digital sales, the Knights and the slew of other releases make them good money, I can see GW turning this around in the short term.

It's the kits that make them the big money, and they have just released an excellent one, so I suppose we'll be seeing a little profit spike from this.

I dislike many GW policies, but I don't see them going under from this decline, not for a while anyhow.

Barfolomew wrote:

We have a company in GW who supports a luxury item in a niche market that the majority of investors have no idea about. The news out of GW to the investors is the same as the news to the customers, none, meaning investors are purely going off quarterly/bi-annual reports, dividends and stock performance against the market.

This is incorrect.

These institutions elected the directors of the company who voted in the CEO. They better know exactly what is going on. If they don't have a clue, they didn't elect the right person to represent their interests to the board of directors.

These guys will know a hell of a lot more than you'll ever see disclosed in a report published by the company or their auditors.

 Da Boss wrote:
If the digital sales, the Knights and the slew of other releases make them good money, I can see GW turning this around in the short term.

It's the kits that make them the big money, and they have just released an excellent one, so I suppose we'll be seeing a little profit spike from this.

I dislike many GW policies, but I don't see them going under from this decline, not for a while anyhow.

HA! Not likely. One or two good kits is not going to turn this around, not with a 30% drop in profits. GW will sell a few thousand knights. BFD for GWs bottom line. GW needs more to bring the numbers up.

Even at a 50% profit margin on wholesale, you figure 40 bucks profit per knight, maybe 50 if you figure some are direct sales. If GW is lucky, maybe knights might bring in 150K profit. I doubt it would be that much.

dereksatkinson wrote:

Barfolomew wrote:

We have a company in GW who supports a luxury item in a niche market that the majority of investors have no idea about. The news out of GW to the investors is the same as the news to the customers, none, meaning investors are purely going off quarterly/bi-annual reports, dividends and stock performance against the market.

This is incorrect.

These institutions elected the directors of the company who voted in the CEO. They better know exactly what is going on. If they don't have a clue, they didn't elect the right person to represent their interests to the board of directors.

These guys will know a hell of a lot more than you'll ever see disclosed in a report published by the company or their auditors.

So how would you interpret that several (the majority?) of the institutional stakeholders this time last year have now sold all or a substantial part of their stake, prior to the interim result that triggered all the furore?

No fund had any say in selecting the management, except stockholder Tom Kirby himself. And currently no fund holds more than 150% of what Tom Kirbyhimself owns. Biggest fund sold almost half its shares within about a year.

 Kroothawk wrote:
No fund had any say in selecting the management, except stockholder Tom Kirby himself. And currently no fund holds more than 150% of what Tom Kirbyhimself owns. Biggest fund sold almost half its shares within about a year.

That's...that's simply not true Kroot.

By law, the directors of a plc must be elected by the shareholders on the basis of one share, one vote.

Now, as you quite rightly point out, Kirby has a substantial number of shares, so consequently has a commensurate amount of influence, but check the agenda for any AGM and I bet you'll see that election/re-election of the directors is on them, even if the voting process itself is perhaps somewhat of a formality, it happens.

dereksatkinson wrote:
These institutions elected the directors of the company who voted in the CEO. They better know exactly what is going on. If they don't have a clue, they didn't elect the right person to represent their interests to the board of directors.

These guys will know a hell of a lot more than you'll ever see disclosed in a report published by the company or their auditors.

While they do receive more detailed reports, I still think they drink their own cool-aid and are not knowledgeable of the market.

Tom Kirby - Accountant, been at GW since 1998 (out of touch)
Kevin Rountree - Accountant, been at GW since 1998 (out of touch)
Chris Myatt - Hospice director (probably the most qualified as he's familiar with the terminally ill)
Nick Donaldson - Lawyer/Banker (probably why the IP is being pursued so much)
Elaine O’Donnell - Accountant (cares about $$, not service or quality)

Let's compare this to Hasbro

B. Goldner - At Bandai prior to Hasbro
A. Verrecchia - Hasbro since 1965
B. Anderson - Scott Paper prior to Hasbro
A. Batkin - investment firm
F. Biondi - private equity fund specializing in media
K. Bronfin - investment arm of diversified media company
J. Connors - full-service marketing, advertising and communications company
M. Garrett - international food and beverage company
L. Gersh - integrated media and merchandising company
J. Greenberg - funds transfer company
A. Hassenfeld - Hasbro for 40 years
T. Leinbach - global logistics and transportation and supply chain solutions provider
E. Phillip - a non-profit healthcare organization

To me, Hasbro has a much better board because the majority is customer focused, not a bunch of accountants.

Does GW know what's going on in the company? Yes. Do they know how to fix it? Hell no.

 azreal13 wrote:
So how would you interpret that several (the majority?) of the institutional stakeholders this time last year have now sold all or a substantial part of their stake, prior to the interim result that triggered all the furore?

Unless you see those institutional investors come out as give a reason for them dropping their shares, you can only speculate.

Possible explanations are...

1. They made a lot of money and wanted to take profits.
2. They didn't think their future prospects were as good.
3. They were being forced to sell to cover redemptions.
4. Another opportunity presented itself and they raised capital to participate in it.

We simply don't know why they decided to sell. It could be that they didn't like the direction or it could be something entirely unrelated. it's all speculation. You typically don't want to see insider selling but it's not the end of the world if you do. These are still normal people living normal lives. Even if they "think" something isn't going to work, that doesn't mean it wont. At the same time.. Just because institutional investors think that GW is going to make a killing, doesn't mean they will. None of these guys are holding crystal balls.

 azreal13 wrote:
That's...that's simply not true Kroot.
By law, the directors of a plc must be elected by the shareholders on the basis of one share, one vote.

I don't talk about theory or principle. But do you really think that a big investment fond decided that Wells should go, that Kirby should be CEO and Chair, to continue his policy of liquidating GW into the ground? Everyone with some interest in the company and a basic knowledge of economics would not have let him proceed to save their investments, but the funds only cared about maximized dividends regardless of the consequences and did not interfere with Kirby's reign, selling their shares in the meantime to Kirby's level just in case.

 Kroothawk wrote:


, but the funds only cared about maximized dividends regardless of the consequences and did not interfere with Kirby's reign, selling their shares in the meantime to Kirby's level just in case.

Dude, you need to stop because you are getting it so wrong so consistently. You are trolling and dont even realize it.

Any investment made by an investment firm with its own shareholders and direct owners to satisfy cares about the safety of the initial investment, holding onto capital gains already made and future income streams in that order. They certainly dont just care about dividend streams.

To judge the safety of the first two and the viablility of the last one they will have analysts pouring over numbers and regular meetings with management - especially if large enough to cause an issue if they dump the stock. Firms, in 99% of case, just don't invest in the manner you are talking about.

 Kroothawk wrote:

 azreal13 wrote:
That's...that's simply not true Kroot.
By law, the directors of a plc must be elected by the shareholders on the basis of one share, one vote.

I don't talk about theory or principle. But do you really think that a big investment fond decided that Wells should go, that Kirby should be CEO and Chair, to continue his policy of liquidating GW into the ground? Everyone with some interest in the company and a basic knowledge of economics would not have let him proceed to save their investments, but the funds only cared about maximized dividends regardless of the consequences and did not interfere with Kirby's reign, selling their shares in the meantime to Kirby's level just in case.

You can feel however you like dude, but at this point you're confusing your own prejudice for some sort of twisted fact.

No, funds have no direct influence over Kirby's, or any other GW employee's, actions, whatever they may be, but if sufficient numbers of people had fears over the direction GW was heading, then they would have an opportunity to remove him from the position.

I think perhaps you should take a time out from this thread, as it is becoming blatantly obvious that your reach is exceeding your grasp in terms of the subject matter, and coupled with your already fairly robust dislike for all things GW, you're coming over a little more "frothing loon" than I suspect you'd like.

Barfolomew wrote:

dereksatkinson wrote:
These institutions elected the directors of the company who voted in the CEO. They better know exactly what is going on. If they don't have a clue, they didn't elect the right person to represent their interests to the board of directors.

These guys will know a hell of a lot more than you'll ever see disclosed in a report published by the company or their auditors.

While they do receive more detailed reports, I still think they drink their own cool-aid and are not knowledgeable of the market.

Tom Kirby - Accountant, been at GW since 1998 (out of touch)
Kevin Rountree - Accountant, been at GW since 1998 (out of touch)
Chris Myatt - Hospice director (probably the most qualified as he's familiar with the terminally ill)
Nick Donaldson - Lawyer/Banker (probably why the IP is being pursued so much)
Elaine O’Donnell - Accountant (cares about $$, not service or quality)

Let's compare this to Hasbro

B. Goldner - At Bandai prior to Hasbro
A. Verrecchia - Hasbro since 1965
B. Anderson - Scott Paper prior to Hasbro
A. Batkin - investment firm
F. Biondi - private equity fund specializing in media
K. Bronfin - investment arm of diversified media company
J. Connors - full-service marketing, advertising and communications company
M. Garrett - international food and beverage company
L. Gersh - integrated media and merchandising company
J. Greenberg - funds transfer company
A. Hassenfeld - Hasbro for 40 years
T. Leinbach - global logistics and transportation and supply chain solutions provider
E. Phillip - a non-profit healthcare organization

To me, Hasbro has a much better board because the majority is customer focused, not a bunch of accountants.

Does GW know what's going on in the company? Yes. Do they know how to fix it? Hell no.

Neither board looks right. Hasbro has legacy members like Hassenfeld (his family put the 'has' in Hasbro). Many of the other members' professions (health care, food and beverage, paper products, funds transfer, investment firm) do not indicate that they have any special qualifications to run a toy company. I suspect that many of them are the board because of connections. It would be good to see people who know something about making good toys on the board. They could be psychologists, sculptors, engineers, etc. As it is, the board looks very much like how they practice business: make some toys in china (global logistics) and market them (marketing). The lack of competition from other companies makes this possible. Gone are the days of Kenner, Mego, Ideal, Gabriel, Galoob, etc.

GW are finding it much more difficult, as there is more competition. Certainly the other companies cannot produce plastics of the quality or quantity that GW can, but the market is not particularly concerned. The competitors that are better run (in my estimation), such as WYRD, are making great strides.

I suppose the difference between peoples point of view is based on their standpoint.

For people invested in GW plc, they want to see a 'blip' that is nothing to worry about long term.And those who have experience in the stock market can apply their experience of buying and selling habits, and make their own informed opinions based on that.

However, those people who have seen the way GW plc conducts itself in relation to its customers and independents.
May see the current drop in profits and revenue as the 'tipping point'.

Where the GW customer base has fallen( some say driven off,) to the extent where competition has a a good foot hold, and is eating into GW plc market share year on year.
Most people believe the market has been growing despite the recession.In a previous shareholder preamble Mr T Kirby said the same thing.That the (TTMG) hobby is an escape from the pressures of reality, and so is not effected by an economic down turn.

GW plc has has lost sales volumes year on year for nearly a decade.So some see this as the point of no return .Eg selling less for more money has stopped working .
And so GW plc need to adopt a different approach or continue to loose profits ...

 fullheadofhair wrote:
Any investment made by an investment firm with its own shareholders and direct owners to satisfy cares about the safety of the initial investment, holding onto capital gains already made and future income streams in that order. They certainly dont just care about dividend streams.

That is only correct in principle, but would you say that letting Kirby powershrink the company (including raising prices, firing sales staff, reducing opening hours, hiring for attitude instead of skill, closing HQs, no advertising, sinking sales and revenue in a growing market) is a sustainable strategy to protect your investment? I don't think so. Fact is, the biggest investor, Nomad, just burned 7.2 Mio £ or 12 Mio US$ customer money in January alone, because they let Kirby proceed. They would have lost more, if they hadn't sold almost half their shares within a year before that.

Weeble: I'll take your word for it, I've zero experience in any kind of business. It just seemed to me that the faster rate of releases, including but not limited to Knights, could rejuvenate them a bit. Especially if they're keeping the costs down, which would seem to be the case with the digital/rules releases anyway.

(I mean, really, I find it hard to believe that the rules could cost that much to develop. They are relatively unchanged from edition to edition, generally only new units need rules and those seem poorly tested anyhow, and fluff/art is copy pasted from times when the company was actually creative mostly.)

 Da Boss wrote:
It just seemed to me that the faster rate of releases, including but not limited to Knights, could rejuvenate them a bit.

You are aware that the faster rate of releases has been in coincidence with a 10% decline in revenue and a 30% decline in profit?

So, its not worth a cheeky buy in on expectation of a return to the prior highs?

With the faster releases/declining profits issue, im sure product price is an issue, and quality (finecast), but what else do you think it is, is it just that theyve pushed the price point too far, or are we looking at a downturn due to any number of other issues? (over saturation of products, releasing the wrong lines, poor design of rules, diminishing local community in stores, just general poor attitude towards customers, increase in competition...)?

@Sirus42.
The core problem of GW plc is is they do not have a marketing department!
After GW became a plc , the only periods of growth have been accompanied by other companies doing the marketing for GW .
M&B Games in the 1990s, and New Line Cinema and Diagnosti magazines in the 2000s.

So GW plc has grown from a small company where the developers were in touch with the customers.(Through WD etc.)
To a large corporation with the man making the decisions having NO contact with or idea who the actual customer base is or could be.

Without a marketing department to provide facts, Mr Kirby can simply make up any assumption he feels like, to back up the direction he want to go.(Generally following the path of least effort.).

Mr Kirby seems to believe targeting children with rich parents is the best business strategy for GW plc.

However, all other companies in the TTMG hobby believe great game play and value for money is what they should focus on...

 Kroothawk wrote:

 Da Boss wrote:
It just seemed to me that the faster rate of releases, including but not limited to Knights, could rejuvenate them a bit.

You are aware that the faster rate of releases has been in coincidence with a 10% decline in revenue and a 30% decline in profit?

Correlation is not causation. It's entirely possible that without the faster rate of releases, it could have been a 20% decline in revenue, and a 45% decline in profit.