Tag: Share Prices

Silver Prices Lead To Surprising Show Of Optimism

Silver prices fell to the lowest they’d ever been on Monday. While this may at first seem a discouraging sign, the word is that what will follow is a massive opportunity to buy.

As of right now silver is trading at around $17.70 per ounce. For comparison’s sake, gold is currently valued at roughly $1,220 per ounce.

Such an astronomical gap can likely be blamed on the “buy gold” craze that took hold during the worst of the recent recession.

When the dust settled, everyone who was anyone coveted gold as protection from a weakened dollar and significant loss of wealth.

That outlook seems to have changed drastically over the past year.

The price of silver and gold have both been negatively affected by a strong dollar and the supposed inevitability of rising interest rates.

Chart. #dollar strength is helping to drive down #commodities. What implications for the US & Fed? @BloombergNews pic.twitter.com/ambNYyPMFD

— Rishaad Salamat (@RishaadTV) September 24, 2014

On the other hand, the slightly negative economic outlook in Europe and Asia may also be driving the value of both silver and gold downward.

Precious metals are presently seen in a bearish light, but could this change?

As the value of silver continues to plummet, patient observers feel that there’s nowhere for the long neglected metal to go but up.

However, not just yet.

Investors are encouraged to wait until silver falls to $15 per ounce before they elect to buy. That would represent a 12 percent loss from where the metal closed on Monday.

The reason could be that this represents a supposed baseline for the metal; it’s not expected to drop much lower than this for the foreseeable future.

Onlookers do not expect either gold or silver to drop much lower than their current prices. Therefore investors are encouraged to wait out the falling price of silver. Once it hits the magical $15 range, some may start buying like there’s no tomorrow.

As volatile silver continues to fluctuate in value, it will be interesting to see how many investors take that advice to heart.

September 24, 2014
Lululemon Shares Fall After Analyst Criticizes Company’s Lack Of Strategy

Lululemon shares took a beating today after a Sterne analyst said the company didn’t provide an effective plan for growth. The company’s share price was down 2.64 points before trading ended today, but the price has risen 0.06 points in after hours trading. While a falling share price is certainly trouble, this isn’t the first time that the athletic wear company has been in hot water this year.

Back in March, Lululemon announced that it was recalling a number of its popular black Luon yoga pants. The company said that the affected pants were affected by a lack of coverage that left the sheerness at a level the company said fell short of its “very high standards.” After the recall began, some customers reported that they were asked to wear their yoga pants in front of employees to prove that they were of inferior quality and shareholders even sued the company claiming that it should have properly tested the yoga pants before shipping them to stores. The lawsuit was dismissed earlier this month.

So, why did Lululemon’s share price take a hit? It would appear that the company finally has all its ducks in a row after all. As it turns out, the company isn’t impressing shareholders and analysts anymore now than it was earlier this month. Sam Poser, an analyst with Sterne Agee & Leach, Inc., says the company “did not provide any updates on its long-short-term financial objectives.” He also added that the company “did not address in specific terms plans to reengage with the customer at the store level and reignite new customer acquisition.” In the end, Sterne rated the company “underperform.”

Other players on Wall Street have been skeptical of the company as well. The Street rated Lululemon’s shares as a Hold and said that it could neither justify a positive or negative rating relative to other stocks. It says that the company has shown solid revenue growth, but warns that its stock performance over the last year has been “generally disappointing.”

So, what does Poser say the company needs to do to turn things around? It’s really quite simple:

“A detailed constructive strategy, beyond the improved product, not just words, is needed to rebuild the aspirational quality of the Lululemon brand,” Poser wrote. “Most of those who do not see the brand as damaged are loyal Lululemon customers, but new customers are needed for the long-term success of both the company and the stock.”

Maybe the company should heed the advice it gave to its fans on Friday:

Do more with less.

— lululemon athletica (@lululemon) April 18, 2014

[h/t: Bloomberg]
Image via lululemon/YouTube

April 21, 2014
Zynga Announces Q4 And Year End Results, Will Bring More Games To Mobile In 2013

After the beating Zynga took in 2012, nobody was really looking forward to its year end results. It was assumed that everything would be doom and gloom for the troubled social game developer. The good news is that revenue and DAUs/MAUs are up. Everything else is just kind of middling.

Starting off with revenue, Zynga reported that full year 2012 revenue of $1.28 billion, which is an increase of 12 percent year-over-year. Quarter four revenue was at $311 million, which is pretty much flat year-over-year. Bookings in both full year and quarter four were down 1 percent and 15 percent respectively.

“The biggest highlight of the quarter was seeing our team deliver a successful sequel in FarmVille2, a next generation social game that offers cutting edge 3-D experiences loved by millions of FarmVille fans,” said Mark Pincus, CEO and Founder, Zynga. “In 2013 we’re excited to bring this new class of social games to mobile phones and tablets and build a network that offers an easier, better way for people to play together.”

On a year-over-year basis, DAUs and MAUs were up for Zynga. DAUs increased from 54 million in Q4 2011 to 56 million in Q4 2012. MAUs increased from 240 million in Q4 2011 to 298 million in Q4 2012. On a consecutive quarter basis, however, DAUs and MAUs were down 6 percent and 4 percent respectively.

Even if its quarterly users were down, Zynga still had some of the top performing games on Web-based platforms. It also had five of top the 10 games on Facebook in December of last year. That’s just one month, however, and data from App Center showed Zynga had none of its games in the top five Facebook games of 2012.

“Our team executed well in the fourth quarter and made important progress in building sustainable new revenue streams and further aligning our company around our best growth opportunities,” said David Ko, Chief Operations Officer, Zynga. “2013 will be a pivotal transition year and we are focused on achieving three strategic objectives: growing our franchises on mobile and web, expanding our network and maintaining profitability on an adjusted EBITDA basis. With 298 million monthly average users, including 72 million on mobile alone, Zynga already has the largest social gaming audience and remains the best positioned company to lead in building the future of social gaming.”

Here’s a breakdown of the annual and fourth quarter results:

2012 Annual Financial Summary
Revenue: Revenue was $1.28 billion in 2012, an increase of 12% on a year-over-year basis. Online game revenue was $1.14 billion, an increase of 7% on a year-over-year basis. Advertising revenue was $137 million, an increase of 84% on a year- over-year basis.
Bookings: Bookings were $1.15 billion in 2012, a decrease of 1% on a year-over-year basis.
Net loss: GAAP net loss was $209.4 million in 2012, which included $282.0 million of stock-based expense and $49.9 million of income tax expense driven by a $53.8 million charge related to accelerating the implementation of Zynga’s international structure.
Adjusted EBITDA: Adjusted EBITDA was $213.2 million in 2012, a decrease of 30% year-over-year, primarily due to increased cash investment in research and development, datacenters and infrastructure.
Non-GAAP net income: Non-GAAP net income was $58.2 million in 2012, a decrease of 68% year-over-year, primarily due to increased investment in research and development.
EPS: Diluted EPS was ($0.28) for the full year 2012, compared to ($1.40) for the full year 2011.
Non-GAAP EPS: Non-GAAP EPSwas $0.07 for the full year 2012, compared to $0.24 for the full year 2011.
Cash and Cash flow: As of December 31, 2012, cash, cash equivalents and marketable securities were approximately $1.65 billion, compared to $1.92 billion as of December 31, 2011. Cash flow from operations was $195.8 million for the year ended December 31, 2012, compared to $389.2 million for the year ended December 31, 2011. Free cash flow was ($114.3) million for the year ended December 31, 2012 as reported, or $119.4 million excluding the purchase of the company’s headquarters, compared to $137.3 million for the year ended December 31, 2011.

Fourth Quarter 2012 Financial Summary

Revenue: Revenue was $311.2 million for the fourth quarter of 2012, flat compared to the fourth quarter of 2011 and a decrease of 2% compared to the third quarter of 2012. Online game revenue was $274.3 million, a decrease of 3% compared to the fourth quarter of 2011 and a decrease of 4% compared to the third quarter of 2012. Advertising revenue was $36.8 million, an increase of 35% compared to the fourth quarter of 2011 and an increase of 19% compared to the third quarter of 2012.
Bookings: Bookings were $261.3 million for the fourth quarter of 2012, a decrease of 15% compared to the fourth quarter of 2011 and an increase of 2% compared to the third quarter of 2012.
Net loss: Net loss was $48.6 million for the fourth quarter of 2012 compared to a net loss of $435.0 million for the fourth quarter of 2011. Net loss for the fourth quarter of 2012 included $86.3 million of income tax expense driven by a $53.8 million charge related to accelerating the implementation of Zynga’s international structure and $14.9 million of stock- based expense compared to $530.0 million of stock-based expense included in the fourth quarter of 2011.
Adjusted EBITDA: Adjusted EBITDA was $45.0 million for the fourth quarter of 2012 compared to $67.8 million for the fourth quarter of 2011 and $16.2 million in the third quarter of 2012.
Non-GAAP net income: Non-GAAP net income was $6.9 million for the fourth quarter of 2012, down from non-GAAP net income of $37.2 million in the fourth quarter of 2011 and up from a non-GAAP net loss of $0.4 million in the third quarter of 2012.
EPS: Diluted EPS was ($0.06) for the fourth quarter of 2012 compared to ($1.22) for the fourth quarter of 2011 and ($0.07) for the third quarter of 2012.
Non-GAAP EPS: Non-GAAP EPS was $0.01 for the fourth quarter of 2012 compared to $0.05 for the fourth quarter of 2011 and $0.00 for the third quarter of 2012.
Cash and cash flow: As of December 31, 2012, cash, cash equivalents and marketable securities were approximately $1.65 billion, compared to $1.65 billion as of September 30, 2012. Cash flow from operations was $19.8 million for the fourth quarter of 2012, compared to $164.0 million for the fourth quarter of 2011. Free cash flow was $29.5 million for the fourth quarter of 2012 compared to $101.9 million for the fourth quarter of 2011.
Share Repurchase Program: As of December 31, 2012, Zynga repurchased approximately 5 million shares of common stock under its stock repurchase program. The remaining authorized amount of stock repurchases that may be made under this plan was approximately $188 million as of December 31, 2012.

I think we all expected this result. Zynga started off 2012 doing pretty well for itself, but it made a few bad decisions in investments early on, including the acquisition of OMGPOP for $200 million. The company was also forced to shut down a few studios, lay off over 100 employees and stop hosting numerous games, including the hotly anticipated, but ultimately ignored Mafia Wars 2.

Zynga’s results may not have been great, but investors are somewhat pleased with its performance. The company’s stock was trading 7 percent higher at $2.74 at closing. It’s still rising in after-hours trading with the company’s share price currently at $2.88.

February 5, 2013

RIM, now known as BlackBerry, unveiled its latest set of handsets today that run its latest BlackBerry 10 operating system. The crowd present at the launch event were excited about the product, but investors were less than impressed.

RIM’s share price was at a little over $16 this morning before the BlackBerry 10 handsets were unveiled. After the unveiling, there was a substantial drop to $14.44. Shortly after, the share price climbed a little to only drop again to $14.25. Since then, it’s been steadily decreasing with its share price now at a little under $14, or a drop of 11 percent.

So, what happened? A new product launch is usually something to celebrate, but the response from investors has obviously been less than positive. Speaking to Yahoo Finance, Dave Garrity of GVA Research says that RIM’s renewed focus as a smaller company may not help in the end as “the list of businesses which ‘successfully shrunk themselves to prosperity’ is short.”

It also seems that many investors were not thrilled with CEO Thorsten Heins performance on stage this morning. The scripted event did little to sell any of them on the future of BlackBerry 10 as Heins’ excitement for the product rang hollow.

RIM needs to boost investor confidence with its latest product, and it hasn’t exactly done that during this first impression. It’s important to remember, however, that today is just that – a first impression. Investors might change their tune once the phone gets in the hands of consumers around the world. It might even end up being more of a success than anybody could have hoped. We’ll all just have to wait and see.

If you need to catch up on all the BlackBerry 10 news of today, check out our extensive coverage here.

Why Is Apple’s Share Price Dropping So Quickly?

When the iPhone 5 launched, it looked like Apple was on top of the world. The company’s stock hit an all time high with an individual share price of $702. Fast forward to today and the company’s individual share price is now sitting at $485. What happened, and can Apple fix it?

It’s easy to see why Apple’s stock was so successful in the months leading up the launch of the iPhone 5. The company was reporting record profits every quarter on massive sales of both of its iPhone and iPad product lines. The launch of the iPhone 5 was in itself a momentous occasion, but it all started to go downhill a little after that.

Only a month after the iPhone 5 launched, Apple announced the iPad Mini. The mini-tablet was Apple’s attempt to directly compete with Google’s Nexus 7 and Amazon’s Kindle Fire HD. First impressions are often ugly, however, and investors tore into it. The company’s share price stumbled to about $613-$615.

Since then, the iPad Mini has proven to be a smart move on Apple’s part. Early reports indicate that it’s doing incredibly well, and that it’s even more popular than the iPad. Why is Apple’s stock taking a beating then when everything seems to be going well? It’s because the iPad Mini is more popular than the iPad. Apple envisioned a world where consumers would buy both the iPad and the iPad Mini as a “sidearm” of sorts. Consumers are instead opting to only buy the iPad Mini. That cuts into the company’s profits as it makes less money per iPad Mini sold.

Of course, the iPad Mini only explains one part of the problem. The other problem has only manifested itself recently, and caused a sharp drop in Apple’s stock. A report from Monday said that Apple’s component orders were being cut by half in response to weaker-than-expected demand for the iPhone 5. The news cut through the company’s share price and dropped the price to below $500 for the first time in over a year.

It should be noted that $500 per share is an extraordinary accomplishment, and something that few companies can ever achieve, That being said, it’s rather worrisome to see a company’s stock drop by over $200 in less than six months. Analysts are still remaining optimistic, however, with Value Walk reporting that analysts at Nomura are maintaining a neutral rating for Apple with a target price of $530 per share. It’s below that price for now, but the idea is that Apple will be able to stabilize itself around that price in the coming months.

So how can Apple retain its position as the most profitable company in tech? It’s not exactly an easy prospect as the company has made a name for itself with investors by reporting monster profits every quarter, but that might not help the company sell as much hardware anymore. Following the lead of the iPad Mini, there are now reports of a cheaper iPhone for emerging markets. Apple denies the reports, but there’s enough evidence to say with confidence that Apple is looking to shake up the iPhone brand in some way in 2013. If it is indeed a cheaper phone, investors might not be pleased as it will mean even less profits.

As for everything else, Apple needs to focus on innovation instead of litigation. The company will argue that it’s only protecting the innovations it has introduced to market, but where were the new innovations in the iPhone 5? A slightly bigger screen and Passbook does not an innovative phone make. Android and hardware makers who leverage the OS are running circles around it.

The iPad isn’t fairing much better as Apple introduced a fourth generation iPad in the same year as the third generation was released. The only difference between the two was a faster processor. The company that Steve Jobs built has become too comfortable in its place as the market leader, and is inviting competitors to usurp it.

If Apple really wants to get back on top, it will have to start being a consumer technology company again. Engaging in petty corporate warfare with Google at the expense of its users isn’t going to win them any fans or investor support. For now, it should solely focus on its consumers instead of worrying about any outside threats or influences. Apple was at its best when Steve Jobs did whatever he wanted, and the company needs to recapture that defiant spirit.

Facebook And Zynga Aren’t So Close Anymore

Zynga may be in the gutter these days, but it used to not always be like that. The company used to be on top of the world thanks to its close relationship with Facebook. The social network benefited from this relationship as well, but both companies are being forced to rethink their strategies as the market changes around them.

Reuters reports that Zynga and Facebook have recently rewritten the terms of a partnership that gave the social games maker preferential treatment on the social network. That treatment is what largely led to Zynga’s early success, but other game developers have shied away from developing titles for Facebook platform due to Zynga’s perceived monopoly on the platform. The new agreement neuters Zynga’s close relationship thus encouraging more game developers to create games for the platform.

The agreement has two parts to it that could lead to very interesting results for both companies. For one, the new agreement allows Facebook to develop its own games. Reuters spoke to a person close to the company, and they said that Facebook has no plans to develop games. That could change, but some game developers might not take kindly to facing competition from the platform it develops for.

As for Zynga, the company now has more independence on its own social gaming portal – Zynga.com. As per the old agreement, Zynga had to use Facebook Credits on its own site, but that’s no longer the case. Likewise, the company no longer has to display ads for Facebook on its own site.

In short, Zynga is now governed by all the rules that other game developers are held to. The company will no longer get any special treatment or early access to game development tools. It levels the playing field for other developers, but Facebook was already doing that with services like App Center. Zynga itself blamed these new methods of discovering games as a reason for its abysmal performance this year. The company’s games were no longer prominently displayed on the various game pages around Facebook, and other games were able to move in on its turf.

Facebook’s shares only dropped 0.37 percent in after-hours trading, but Facebook will probably bounce back this morning. Investors are probably glad that Facebook is no longer closely tied to Zynga and its toxic shares. As for Zynga, its share price dropped 12 percent in after hours trading, but has slowly climbed up to only an eight percent loss.

Zynga COO Stripped Of His Power After Stocks Collapsed

To say that Zynga is between a rock and a hard place right now would be a bit of an understatement. The company is more like between a wall of cacti and an iron maiden. Either way, they’re going to bleed. That bleeding is starting today as one of the company’s major executives has reportedly lost his power.

Bloomberg is reporting that Zynga COO John Schappert is no longer overseeing game development at Zynga. The report makes it clear that Schappert wasn’t fired, but he pretty much has no influence over the products that Zynga makes anymore. The teams in charge of games at Zynga must now report directly to CEO Mark Pincus.

Considering that Schappert was one of Zynga’s high profile talent acquisitions, his downgrade is a sign that all is not well. Pincus’ involvement in game design makes its clear that Zynga wants to make sure that their next game is an absolute hit. If not, it could spell more doom and gloom for the games company that took the world by storm, then tumbled to a share price of $2.82.

According to Bloomberg, the removal of Schappert and other organizational changes signals an increased move to mobile for the company. Zynga has not had a big hit in the mobile space yet, so their reorganization may help them make a splash. The only problem is that mobile is far more competitive than Facebook and Zynga might not be able to survive off of brand name alone anymore. They will need to craft new and exciting experiences instead of just copying the design of other popular mobile titles.

On top of the reorganization, Zynga is also facing investigations over insider trading. It seemed a little suspicious that Pincus and other Zynga insiders dumped their stock before the price plunged. The results of those investigations should prove interesting. We’ll keep you up to date on any new developments as Zynga is sure to be the center of a lot of news in the coming weeks.