Sunday, July 19, 2015

Questions for GigaMedia (GIGM) ???

I'm scheduled to meet with Taiwan-based online gaming and e-commerce company GigaMedia (ticker: GIGM) this week.

My preliminary list of questions is below -- please comment if you have any additional:
  1. Until now, GIGM has been largely an online gaming company. Why pivot? Why now?
  2. Why cosmetics e-commerce?
  3. What's so compelling about Strawberry?
  4. The PR announcing the Strawberry acquisition referred vaguely to synergies without much explanation. Can you provide more color?
  5. How profitable is Strawberry? Margins?
  6. Does it compete with Chinese cosmetics e-commerce company Jumei (ticker: JMEI)?
  7. How are you funding the acquisition?
  8. Can you share any updates on your gaming and cloud businesses?
  9. Is there anything you can say about the departure of former CFO Dirk Chen? Why will he remain on the board?
  10. GIGM stock trades at ~50% of cash. How do you explain that?
  11. Has management considered taking the company private?
  12. Why did you stop hosting earnings calls? Any plans for future calls?
  13. Do you have plans to increase your investor relations (IR) efforts in the US?

If you have additional questions please let me know -- in a comment below, on StockTwits, on Twitter, or via email. Thank you.

I will publish a blog post following the meeting.

UPDATE: I met with CEO Collin Hwang and IR Director Amanda Chang last week. Transcription of our conversation is in process. I hope to publish it here on the blog in the next week. Thanks for your patience.

UPDATE #2 (9.17): I'm still waiting for management to clarify certain points in the interview. I spoke to them yesterday and they intend to respond. They're determined to share their story. The sooner the better for all of us.

11 comments:

Anonymous said...

1) Please specify the comparable companies including net income used in determining a purchase for 93M for Strawberry for 70% ownership and were these comparable companies turning a profit? Why is Strawberry being valued (70%)at 72M more than their equity or net assets and how much of those assets are intangibles on Strawberry's books? What is the expected annual return on 93M invested and what year will that begin?

2) Why has the BOD not pursued partners, solicited suitors (white Knight)for company operations, mergers with other gaming operations, all over a 6 year period where sales have declined, net losses occurred, and where stock price has reflected 1/2 the net cash and current assets on hand and declining over the years?

3) The company has made the commitment to increase shareholder value while the stock trades at a fraction of its net assets and its price has decreased 80% post financial collapse. Can you tell us specifically how management has increased shareholder value as of this date and has any assessment been made on the value of operations, net assets and why consideration or a offering for a plan of liquidation has not been adopted by the board?

Ezra Marbach said...

Excellent questions! I'll ask on your behalf.

Anonymous said...

I failed to see any real efforts to lift the stock price to be above $1.00 in the last 180 days. Do you have any plan other than a reverse split to avoid delisting?

Ezra Marbach said...

Great question. I'll ask.

Anonymous said...

Presumably most of the value of Strawberry is intangibles. With the declining results, goodwill value is also likely to drop. Is the company concerned that when auditors do the annual results they will require Giga to do a writedown of goodwill, essentially indicating that the value is less than what was paid and shareholder value has been destroyed?

Anonymous said...

Pertaining to Strawberry, I would like to know why a market analysis hasn't been done to determine the primary reasons for declining sales. Is this due to deterioration of brand equity? Declining market interest? Poor exchange rates? What is the reason? There's some chatter about Strawberry's suppliers making fake/knockoff goods and that is a big concern for GIGM investors.

What is GIGM's plan to turn Strawberry around? What is the time frame for the turnaround? Will GIGM be devoting all of its resources to the forward progress of Strawberry, or will they also continue to pursue their interests in gaming/cloud storage?

Anonymous said...

Any progress?

What the BOD did so far to the company? Why the current CEO was not fired for his performance of these years?

Anonymous said...

man... we are in September and still coming soon?

com'on now..

Ezra Marbach said...

I'm waiting for some clarifications from the company. I understand your impatience. I'm with you.

Anonymous said...

Still no news ???

Anonymous said...

curious if any updates on the clarifications, and if you will publish your interview notes.