GGG 2020 Financial statements have been released - 40% increase in sales!

So, there is some really interesting information in the accounts.

As a general rule when looking at accounts and balance sheets read the notes not the numbers, you can do all sorts of things to massage the numbers but the notes tell you how the numbers are being massaged!

There are 3,333,333 shares in the company valued at 65c a share and they paid a dividend of 102,000,000. So that means each 65c share paid over $30 return. Just to this into context and show how absolutely insane this is, Activision paid 47c on a $91 share; a yield of 0.45% source:

https://www.nasdaq.com/market-activity/stocks/atvi/dividend-history

This is consistent with the type of behaviours generally exhibited by asset strippers. Typically organisations reinvest profits, however, instead of investing into the game and the infrastructure the profits are being paid out. If you are looking for reasons as to why the game is buggy, or there are stability issues, or a lack of development - follow the money as unlike people it cannot lie.

If I were to hazard a guess I would say the Chris Wilson will be resigning as a Director this year and the dividend pay out was in fact him cashing out. I hope I am wrong but this is pretty typical behaviour by a CEO of a small company that has been bought out.

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Onecardtoomany wrote:

So, there is some really interesting information in the accounts.

As a general rule when looking at accounts and balance sheets read the notes not the numbers, you can do all sorts of things to massage the numbers but the notes tell you how the numbers are being massaged!

That isn't how it works. I'm not sure which movie or youtube clip you learned this from, but financial statements are prepared in accordance with accounting standards; and these ones were audited by PwC.

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Onecardtoomany wrote:

There are 3,333,333 shares in the company valued at 65c a share and they paid a dividend of 102,000,000. So that means each 65c share paid over $30 return. Just to this into context and show how absolutely insane this is, Activision paid 47c on a $91 share; a yield of 0.45% source:

https://www.nasdaq.com/market-activity/stocks/atvi/dividend-history

This is consistent with the type of behaviours generally exhibited by asset strippers. Typically organisations reinvest profits, however, instead of investing into the game and the infrastructure the profits are being paid out. If you are looking for reasons as to why the game is buggy, or there are stability issues, or a lack of development - follow the money as unlike people it cannot lie.

If I were to hazard a guess I would say the Chris Wilson will be resigning as a Director this year and the dividend pay out was in fact him cashing out. I hope I am wrong but this is pretty typical behaviour by a CEO of a small company that has been bought out.

It really is amazing how confident someone can be when they have no idea what they are talking about. Dividends are paid out of retained earnings, i.e. current year profit and profits from previous years that were not paid out. They didn't pay a divdend last year, so their retained earnings account kept growing. The website is down so I can't check, but they were sitting on $100m retained earnings + $50m current year profit, meaning that if no dividend was paid, their closing balance would have been $150m.

The rest of your comment..just wow. A company generating $50m profit on $110m revenue (up 40% from last year); generating so much profit that they are able to pay a huge dividend. And your takeaway is that Chris is resigning and tencent is cashing out.


Don't quit your day job, this is some horrendous analysis.

Yeah, so I assume you have never actually reviewed a balance sheet or a set of accounts, or for that matter actually worked for a professional services firm. That's fine, it's an opinion on an internet message board for a game so believe whatever you will, I am not going to get into an argument with someone who has a character called toxicpoeplayer.

For your own benefit I would suggest that you might want to do some research into the use of "best estimates" and "expert judgement" in financial valuations. You might start to understand some of the limits around external auditors. You should also look to understand what retained earnings actually are. Dividends are not paid out of retained earnings, as retained earnings are calculated post dividend payment. Dividends can be paid out of profits, capital, debt or any number o other sources. If you look at balance sheets for many financial institutions in around 2007/2008 you will see that raising debt to pay a dividend was quite common as a result of the GFC.

I will avoid ad hominins as they are a classically fallacious argument (as is the argument from authority which you appear to be attempting with the PWC reference) and they weaken any valid aspects of an argument.

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Onecardtoomany wrote:

Yeah, so I assume you have never actually reviewed a balance sheet or a set of accounts, or for that matter actually worked for a professional services firm. That's fine, it's an opinion on an internet message board for a game so believe whatever you will, I am not going to get into an argument.

The same could be said about anyone that thinks a company generating >$100m revenue can do whatever they want with their accounts. Or someone that thinks a company that just experienced a 40% growth in sales and generating a 45% profit margin is about to have their director resign and their investors 'asset strip' a video game development company.

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Onecardtoomany wrote:

For your own benefit I would suggest that you might want to do some research into the use of "best estimates" and "expert judgement" in financial valuations. You might start to understand some of the limits around external auditors.

You can keep googling random terms and hope that they make you sound smart. It doesn't. Having some wiggle room doesn't allow companies to completely cook their books, as you seem to think.

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Onecardtoomany wrote:

I will avoid ad hominins as they are a classically fallacious argument (as is the argument from authority which you appear to be attempting with the PWC reference) and they weaken any valid aspects of an argument.

No you are right. The fact that the financial statements were audited by PwC makes it more likely that the books were cooked.

If you feel the need to feel right that's fine, everyone is entitled to their own opinion, there is no need to be toxic. I disagree with you but the world is big enough for people to have different views.

Let's just leave it and wait and see what happens.

Good luck in the new league

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killingmasheen wrote:

Yada Yada Yada... People saying GGG will lose players cos of harvest nerfs again and impact revenue.

Ahhh.. no.

Sure, some sour grapes may leave out of spite but they are typically freeloaders anyway who don't pay much.

All we're hearing are the angry minority group who is just angry. They'll go away by next expansion like they always do