Seth Gilbert, 03-18-2008
Over the course of a week there are always a few news items that don’t warrant front page attention but still merit a mention; things like new hires or deals that finally closed after being widely reported when first announced. This week with Electronic Arts hiring a COO,the New York Times proxy settlement and deal closings from Clear Channel and Amazon, there have been a handful that fell into that category. Here’s the roundup in one dose:
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Seth Gilbert, 03-13-2008
Take Two may be developing a boxing game but Electronic Arts has a mean left hook. Today, they showed just how mean by escalating their takeover attempt for the maker of Grand Theft Auto to hostile. EA also aimed a power punch straight at the jaw of T2’s management team by adding a purchase price adjustment that gives shareholders an ultimatum to decide between fattening their own wallets or those of the company’s management.
At issue is the underlying management agreement through which Zelnick Media is compensated for running Take Two.
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Seth Gilbert, 03-12-2008
Earnings are down but forecasts are up. The pipeline is good but some big shareholders are selling. Some small shareholders are suing. There are new severance packages but nothing to fear. “All is well” is the tagline.
Such is the ongoing saga of Take Two Interactive as they sort through their own issues with the added monkey of Electronic Arts’ $2 billion takeover offer on their backs. It’s a story with more twists and turns than an installment of their popular Grand Theft Auto gaming franchise. Here’s the plot summary for the latest news:
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Seth Gilbert, 03-10-2008
Sand Hill Road in Silicon Valley remains ground zero for venture capital investment. In 2007 Silicon Valley outpaced its closest geographic competitor by a factor of nearly three to one (via PWC Moneytree). Still, even with a smaller scale Hollywood Blvd. is getting busier, generating more investment traffic, and building buzz. Saban Capital Group is the latest to hang up a V.C. shingle to address the SoCal market.
First reported in the Hollywood Reporter, Haim Saban’s Saban Capital Group (SCG) is expanding from a focus on broad, large, traditional private equity deals to now also include more venture oriented digital media component in their portfolio mix.
Historically, SCG has been known for large media transactions. Haim Saban himself was behind Fox Family Worldwide which News Corp sold to Disney for $5.2b in 2001. Click to Read More
Seth Gilbert, 03-7-2008
One hundred million dollars buys a lot of iPhones, probably about two hundred and fifty thousand or so. A hundred million also buy a lot of iPhone software development. Just how much will be up to Kleiner Perkins Caufield and Byers (KPCB). As part of Apple’s iPhone Road Map Day on Thursday the Sand Hill Road venture capital firm took the stage to announce the organization of a $100m investment initiative earmarked for developing applications and services for use with the phone.
$100m is a lot of money. Pledging it all to software and services built around a single product sounds significant. But while there is no question it is a strong endorsement of the iPhone’s potential, beneath the headlines the allocation may be less significant than it seems. It comes down how venture funds work and a distinction in phrasing between a fund and a focus area.
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Seth Gilbert,
Jim Keyes cut his teeth squeezing profits out of quickie marts and low cost snacks. After about eight months trying to get Blockbuster back on track, the former 7-11 chief and his management tactics may finally be working.
Thursday Blockbuster (BBI) reported earnings of $38.1m, or 18 cents a share on revenue of $1.57b. Less severance related charges and other onetime costs, earnings came in at $54.9m (26 cents a share). The numbers are a drastic improvement over the $8.3m (4 cents a share) earned during the same period last year. The results also outpaced consensus analyst estimates of about 19 cents a share.
Much of the near term improvement is the result of cost cutting measures including scaling back advertising expenses (decreased about 26%) and closing down about 750 stores.
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Seth Gilbert, 03-5-2008
After another quarter, profitability still remains elusive for TiVo but extending a trend the Digital Video Recorder (DVR) pioneer inched ever so slightly closer to the black. Wednesday the Alviso based company reported a net loss better than expectations.
For the 4th quarter ended January 31st, TiVo reported a loss of $6.34m, or 6 cents a share. The result generously beat consensus analyst expectations (via Thomson Financial) of a loss of 11cents a share. The loss was a significant improvement over a loss of $19.5m, or 20cents a share for the same period last year. The result was also an improvement over the company’s own November guidance (which called for a net loss of $9m to $12m). Adjusted EBITDA was $1.0 million, compared to an Adjusted EBITDA loss of ($15.0) million in the year-ago period.
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