Annual report MA

[billairboy]

"Payments from customers" were actually up SEK 2million. the assets on the balance sheet at only SEK 1million less than previous year. no dount theres creative accounting going on, really if we the player base are to read anything into the accounts we need a proper accountant/investor to explain the points in the document, because as far as i see people read and interpret what they want. otherwise we should just leave it to the real investors, one of which as mentioned is backing MA with $6m and others are apparently investing for their planets.

If you don't count the post "Intangible assets" total assets have decreased with about 13m SEK for the group. Intangible assets are a more uncertain kind of assets, in this case the value of the EU software and the planet of Calypsy. Yes, this have a value, but alwyas hard to tell the value of it and will not help us much if MA runs out of money. But in 2010 they have started to use this asset to get some "real" money, like the Calypso deal.

 

[aridash]

If you don't count the post "Intangible assets" total assets

you cant just start not counting bits, the assets is there nontheless. yes they are burning cash, but where to? staffing costs have risen but it seems (unless im mistaken) most the cash is being invested in the infrastructure. why is this bad? some companies go years with negative cash flow as they build.

as i say, we amatuers dip our toes in these accounts without really understanding or researching the detail. understand this: if MA can no longer run this game at a profit (despite having done so for many years), someone else will buy it to gain the cash* and the cash flow which is very nice thankyou. the value might be a problem for the shareholders, but its not really much difference to us as long as the servers stay up. *which is why i never want to see an IPO, that cash will be gone.

as far as the player base is concerned the important issues are deposits up, investment coming in.

 

[billairboy]

you cant just start not counting bits, the assets is there nontheless. yes they are burning cash, but where to? staffing costs have risen but it seems (unless im mistaken) most the cash is being invested in the infrastructure. why is this bad? some companies go years with negative cash flow as they build.

as i say, we amatuers dip our toes in these accounts without really understanding or researching the detail. understand this: if MA can no longer run this game at a profit (despite having done so for many years), someone else will buy it to gain the cash* and the cash flow which is very nice thankyou. the value might be a problem for the shareholders, but its not really much difference to us as long as the servers stay up. *which is why i never want to see an IPO, that cash will be gone.

as far as the player base is concerned the important issues are deposits up, investment coming in.

The higher up on the assets list, the more difficult it is to say what are the right value of the asset and it is harder to convert it to Cash. Cash is Cash, no problem telling the value in that, other current assets are pretty simple and easy to. Buildings and land are difficult to give an exact value, and intangible assets are very hard, nearly impossible to value. I can spend a year creating a game and say, "I have spent 1 MSek on this so it is worth 1 MSek as an asset". Well, if no one want to buy the game?

And about the cash flow, it is negativ, -18 662 882 SEK.
But i thing they will fix this in 2010 and improve the long run cash flow and profit.

 

[AJack10600]

you cant just start not counting bits, the assets is there nontheless. yes they are burning cash, but where to? staffing costs have risen but it seems (unless im mistaken) most the cash is being invested in the infrastructure. why is this bad? some companies go years with negative cash flow as they build.

as i say, we amatuers dip our toes in these accounts without really understanding or researching the detail. understand this: if MA can no longer run this game at a profit (despite having done so for many years), someone else will buy it to gain the cash* and the cash flow which is very nice thankyou. the value might be a problem for the shareholders, but its not really much difference to us as long as the servers stay up. *which is why i never want to see an IPO, that cash will be gone.

as far as the player base is concerned the important issues are deposits up, investment coming in.

Aridash, some people know very well what they are talking about, I work in finance... you can say that I am trying to read things into the accounts but that's what the job of an analyst is, to "interpret" the numbers and the actions of a company. If Company invests millions in investments and suddenly pulls the plug cos the neg cash flow is killing the company then that is obvious to everybody... Now you can irgnore the facts but a sentence like the CFO is trying to secure funding to secure operations... then that means the shit is hitting the fan.

As I said before, a lot of people have no idea what they are talking about here I agree but when you look at financial results you need to have a critical fiew.

And what I said before is that Cash flow is important. Yes you can have negative cash flow for years... but only if you have reserves. MA has no more reserves. They already used up half the reserves they had left in the first half of 2010 as per their report. That's why suddenly everyhing is put on hold.

Balancesheet means nothing if you don't understand the contrent. Assets as Billboy says is a tricky thing. MA have hung up all the development costs for the whole of CE2 on their balancesheet. Now that is legal and you can do that but you have to be aware that ultimately it's an expense. There is no real value to back it up... except an intangible "game code".

I am saying be wary... you can believe it or not but the company is in emergency mode... MA needs to fix the Cash flow issue FAST !!!

 

[aridash]

some people know very well what they are talking about, I work in finance... you can say that I am trying to read things into the accounts but that's what the job of an analyst is, to "interpret" the numbers and the actions of a company.

really? i've read market reports and research notes from analysts. they are 2-10 pages long and objective about the company under review. i dont see that here. rather a few hundred words from people with preconceived opinons. Im not ignoring facts, im trying to find and understand them. the fact the CEO is seeking investment can be good or bad: i want to see the deeper analysis to support either opinion, not opinion with no foundation. i see no one giving a professional research based analysis.

so you say the shit is hitting the fan, yet someone is betting $6m it isnt. which opinion should i trust?

 

[JingyiDai]

so what is the lvl of the shit hitting fan?

from lvl 1 to lvl 10

lvl 1 = oh Marco bough too much candies
lvl 10 = Marco spend all on alchol and he is going to take off soon

cough lol

or is it yellow alert ? only shields up?
or red alert>? charge all phasers and ready photontorpedos?
or it is all hens abandon ship?

 

[Prescott]

On a positive note however, consider the following.

1. The anual report is from 31dec 2008- 31 dec 2009.
It is now june 19 2010, and we are still playing the game. (6 months)

2. After the anual report things like "quests" has ben introduced, boosting the player activity, my friendslist has ben very active.

3. Crystal palace was sold.


my point is, that the cashflow problem may very well already ben fixed.

 

[WoenK]

so what is the lvl of the shit hitting fan?

from lvl 1 to lvl 10

lvl 1 = oh Marco bough too much candies
lvl 10 = Marco spend all on alchol and he is going to take off soon

cough lol

or is it yellow alert ? only shields up?
or red alert>? charge all phasers and ready photontorpedos?
or it is all hens abandon ship?

You forget that the profession levels go up to level 200
And a lot of hens have already abandoned ship, even though we had maybe just a rough sea

 

[Wolverine Queen]

On a positive note however, consider the following.

1. The anual report is from 31dec 2008- 31 dec 2009.
It is now june 19 2010, and we are still playing the game. (6 months)

2. After the anual report things like "quests" has ben introduced, boosting the player activity, my friendslist has ben very active.

3. Crystal palace was sold.


my point is, that the cashflow problem may very well already ben fixed.

Exactly. And MA made through tough times with the CE2, not exactly free fun.

 

[Latinangel1000]

CND is privately owned. So it's up to Neverdie to answer that, not MA/FPC.

You are right, is owned privately by someone that works with them and for them. (planet partners, Rocktropia)

In my experience, employees know when the job place is in trouble a lot sooner that the general public.

But like i said, i hope is not so.

 

[WoenK]

You are right, is owned privately by someone that works with them and for them. (planet partners, Rocktropia)

In my experience, employees know when the job place is in trouble a lot sooner that the general public.

But like i said, i hope is not so.

Where did you get the Information, that ND works for them ?
He has become a buisness partner and he surely knows about upcoming things for Rocktropia, because they are his ideas, but besides that I doubt that he he has any inside knowledge that would benefit him.
I rather suspect, that he needs to sell CND now because MA is way over the promised schedule
And if he really would know something, he would have sold CND last year and cancelled Rocktropia

 

[AJack10600]

really? i've read market reports and research notes from analysts. they are 2-10 pages long and objective about the company under review. i dont see that here. rather a few hundred words from people with preconceived opinons. Im not ignoring facts, im trying to find and understand them. the fact the CEO is seeking investment can be good or bad: i want to see the deeper analysis to support either opinion, not opinion with no foundation. i see no one giving a professional research based analysis.

so you say the shit is hitting the fan, yet someone is betting $6m it isnt. which opinion should i trust?

With all due respect, I don't feel like writing a 10 page analysis about this... I have made up my mind and I have shared some of the key facts. I have spent time to type summaries of my point of view in previous reports.

If you read those, you will note that I myself have said on numerous occasions that I dislike the intransparency in some of the account lines MA are reporting. So how can I do an analysis purely on facts if I have no details to the account lines. I have to make assumptions.

I am not trying to make MA look bad or to have a negative view on purpose. I love this game and I don't want MA to go bust. But what I am trying to say is that althouhg MA manage to make the Profit and Loss look good, the financial situation is not that rosy.

When I see that a company like MA chucks millions down the drain on banking licence, and new property and suddenly pulls the plug on both (after that these projects have been running for years) and on top of that the financial reports exclusively states that the CFO tries to assure funding for 2010, then that should be prove to you as an ordinary person that things are not working quite as they should be.

I am not forcing you to believe what I say. It's my personal assessment. But I have been warning that MA will run into cash flow problems one year ago when everyone was praising the good looking Balancesheets and the Profit they made, but cash flow problems is just what is happening atm if you look at the financials... As a software company you can not just walk to a bank and get a credit for code lines as a collateral... This is a big trickier, which is why MA are now trying to sell out to get cash fast. MA need to now address this negative cash flow with urgency...

I am merely giving my recommendation to the community. People just believe the PnL figures cos they believe that is what's important. And the PnL looks sound. I am just trying to tell this community to watch out for other more important figures that pose a threat to this company. After all we all have "money" in this game.

I don't want MA to go bust, but i am worried it will if they don't act now.. MA has run a very agressive expansion and improvement strategy, nothing wrong with that. The problem is without new cash inflow. You can do this when you have reserves but this is not sustainable in the long run...

Make of it whatever you want... this is just my 2 pec

 

[JingyiDai]

I greatly appreciate AJACK's comments and I am very glad that someone share his critical thinking with us.
Everyone like to heard what they like to heard, truth is proably somewhere in the middle, mostly likely close to AJACK.
But due to intransparency , we can only speculate, what we do see , are the folks at the front row trying to cover their faces . so you cant blame us for try to take cover , just in case shit really hit the fan hmmm mostly it is yellow alert

Wel... mostly MA will survive, they are very smart in sqeeuze peds out of us....

Like those cheap airlines, free game play things

Only differences are
-We can sell our safety belts and oxygen mask and safety books to other passangers....
-This video is just a joke and MA/FPC is for real.

[YOUTUBE]Q-nX6g148mA[/YOUTUBE]

 

[Profit]

...a valuable 2pec...

Considering MA bought it self out in the past, one would have to ask; "is this new $6m proposal actually external to MA?"

Personally AJack, I consider your opinion on these situations to be far more informative than a (potentially) faux buyout. Especially considering that you were pointing to these outcomes a year ago (I remember because I was following the last financials thread carefully too).
I'd go so far as to say that anyone who believes a $6m offer says more about a companies future, than it's financials (as analysed by a professional) is a few slices short of a loaf.

 

[AJack10600]

Considering MA bought it self out in the past, one would have to ask; "is this new $6m proposal actually external to MA?"

Personally AJack, I consider your opinion on these situations to be far more informative than a (potentially) faux buyout. Especially considering that you were pointing to these outcomes a year ago (I remember because I was following the last financials thread carefully too).
I'd go so far as to say that anyone who believes a $6m offer says more about a companies future, than it's financials (as analysed by a professional) is a few slices short of a loaf.

I believe the offer when I see it in the financials

 

[aridash]

With all due respect, I don't feel like writing a 10 page analysis about this... ... It's my personal assessment.

thats fair enough, but some like me can half read the information and get a picture and look to others more knowledgable to fill in blanks or clarfiy. it just frustrating for me there is only single points highlighted and lack of depth to why point A looks bad: theres no context.

for example, you highlight the bank licence, but taken at face value the money spent there is not gone down the drain but has gone towards (presumably) regulatory fees and expenses for the bank project which can be picked up again. Likewise the property if sold for mor than invested doesnt seem such a bad thing, company change their plans to suit circumstances.

As for transparency, yes theres lots of questions raised, but i think people overlook the intended audience: their shareholders, banks that might become involved with them and regulatory requirements. as its not a public company the shareholders are a few, who probably have direct access to the board members (Bridge Investments* probably has a seat on the board?) and CEO/CFO to clarify those points. Do they even need to publish as much as this? If MA where in the UK, their only requirement would be the accounts and brief Directors report. (in fact ive read plc annual reports with less real information than MA give out.) We see alot of what they are doing corporately, possibly too much for the average game player to understand, and too many assumption made that are negative.

*cant recall if thats the correct name, major shareholder.

I'd go so far as to say that anyone who believes a $6m offer says more about a companies future, than it's financials (as analysed by a professional) is a few slices short of a loaf.

thats nice, but it rather ignores the near certainty that who ever is investing the $6m will have had professional analysis of the accounts and due diligence carried out. even if its "faux" manangment buy in from FPC, they still need the money from a bank or somewhere who would require this. The financial report is a record of its past, not its future.

 

[Profit]

...valid post...

thats nice, but it rather ignores the near certainty that who ever is investing the $6m will have had professional analysis of the accounts and due diligence carried out. even if its "faux" manangment buy in from FPC, they still need the money from a bank or somewhere who would require this. The financial report is a record of its past, not its future.

Sorry dude, I gotta point out I wasn't meaning to get at you with that loaf of bread statement, I really shoulda picked my words more carefully lol.
Apologies!

Afaik no other planet partners are privy to that financial information, so I don't see why whoever is (supposedly) taking over Calypso, would be.
This is a complete swing in the dark though, I am not at all sure if planet partners are privy to Mindark's financials.

 

[aridash]

Afaik no other planet partners are privy to that financial information, so I don't see why whoever is (supposedly) taking over Calypso, would be.
This is a complete swing in the dark though, I am not at all sure if planet partners are privy to Mindark's financials.

no offense taken.

why would you make these assumptions? why do you think planet partners, investing $2-5m themselves (reportedly) in their projects, have not have carried out some due diligence and have personal contact with the MA senior mangement? why do you suppose that someone would invest that sort of money with no more detail than publically availble. it seems illogical to me to make these assumptions.

 

[Dan59]

Castle - i think MA made profit with that regardles they are seling it now.

Calypso - im surprised it cost only 6m.
Calypso have active player base ( depositing customers )
Or we get new planet for us and they are selling only Calypso as wirtual planet where buyer have to bring his own players/customers/participants = depositors.


*history

/we will do only project entropia and nothing else than that/
/we learned lession/
/we are here to stay/
/...

 

[Profit]

no offense taken.

why would you make these assumptions? why do you think planet partners, investing $2-5m themselves (reportedly) in their projects, have not have carried out some due diligence and have personal contact with the MA senior mangement? why do you suppose that someone would invest that sort of money with no more detail than publically availble. it seems illogical to me to make these assumptions.

I guess I just made the assumption based on LA's which isn't a fair comparison at all lol

Detailed technical and economic information about the Entropia Platform is provided to companies at a later stage in the process.
http://www.entropiaplatform.com/partners/get-your-own-vw-become-a-/

This seems to suggest you would get some sort of information regarding the financials, outside of what's publicly available.
Then again perhaps whoever is contemplating taking over Calypso, may believe they can add value to what is already here, regardless of whether or not things are currently "rosy"...

 

[Seoul]

Just My Two Pecs....

Just thinking...

Just say you have a company that sells stock...they (the owners) get rich off of the stock. Then one day they hear an idea that the stock is going to to bottom up....BUT, they don't think that will happen...so, what do they do???


You let out 'rumors', you got your 'clones' to post that the sky is falling...you buy cheap and then come back..."


Now, what does that mean here...MA only says that tt is what you can get. If that was 'really' so, then why any news?


In simple I think there is posiblity that MA is trying to drive the 'stock' down so their 'Faired Hairdren Children will make a killing"

Just my 2 pecs...

 

[billairboy]

I can see three factors being involved in the "selling" of Calypso.

1. They need the money.
2. In the future Calypso will be only one of many planets, so the planet could be worth less to MA in the future because of players are split between more planets. At this time next year we could have 50 % of the old Calypso players on the other planets.

3. Because of FPC is owned by MA it is a risk that other planet partners would fell that Calypso got favorised by MA because of that. With a deal that they get 50 % of the profit instead of 100 %, the planet becomes more equal with other planets not owned by MA.

And we still don't know it the deal means FPC get 25 %, the buyer 25 % and MA 50 % of the revenues on the planet or if the buyer gets 50 %. 6m$ are pretty good money in my opinion.

 

[valentin]

The players have 62 MSEK in peds and tt value
MA have 13 MSEK in cash
1 U.S. dollar = 7.8901066 Swedish kronor
calypso is intended to be sold for 6 million usd

So MA needs this 6M $ to give os the TT-value and then its game over for os and then they will only have the planet-partners where MA:s risk is only 50% and not 100% as it is now with Calypso.

So we player would be forced to move to the new planets if we want to play this game because it is the end off planet calypso.

And as MA said many off uors skills will not work on the new planets so many skill will be useless so MA will save some money even in the future.

So the words ( the future for FPC and Planet Calypso is looking brighter than ever... ) are true

 

[billairboy]

The players have 62 MSEK in peds and tt value
MA have 13 MSEK in cash
1 U.S. dollar = 7.8901066 Swedish kronor
calypso is intended to be sold for 6 million usd

So MA needs this 6M $ to give os the TT-value and then its game over for os and then they will only have the planet-partners where MA:s risk is only 50% and not 100% as it is now with Calypso.

So we player would be forced to move to the new planets if we want to play this game because it is the end off planet calypso.

No, Calypso will still be hear
I don't think we should worry so much about this "selling deal". I think it mostly is a way to bring in money and cooperation with a company that have more resources than FPC. The planet will still be runned by FPC i believe.

 

[AJack10600]

Aridash, don't take it personal, I really appreciate you as a member of this community and usually I share your thoughts on EU but in this case, i just don't follow you anymore. I have laid out my arguments. You can keep believing all is good but in my opinion it's not.

Suddenly stopping the Bank Project cos you need the 5m deposit elsewhere and cos you have no furhter funds to carry on the project might be an interim thing, but it shows MA clearly underestimated the costs elsewhere.

The 6m Cash sound less rosie as it seems, if you read the report you will see that this money will be paid until 2013 (or so... don't remember) in installments. To me that sounds like some sort of Buyout... which fair ennough, means someone believes in the Project. Still, I don't think the few 100k that MA will get in 2010 will be ennough to stabilize the cash flow.

Financials are not just a review of the past, this is where you are wrong, and that's why I rang alarm bells in Q2 2009. In the financials are hidden future developments, liabilities, writeoffs, all numbers that allow you to forecast as well... that's what the stock value of a company represents.

Anyhow. This might sound extremely arrogant to say but it's very hard to discuss financials with people who don't understand them or don't know how to interpret them. If people here believe MA is doing fine, ok. I think we are in crisis mode, I have laid out my points and you can try to understand them and think about them, or you can dismiss them which is your own right. I am not saying I know it better. I gave my point of view. I stick to it. Maker of it what you want

 

[aridash]

The players have 62 MSEK in peds and tt value
MA have 13 MSEK in cash
1 U.S. dollar = 7.8901066 Swedish kronor
calypso is intended to be sold for 6 million usd

So MA needs this 6M $ to give os the TT-value and then its game over for os and then they will only have the planet-partners where MA:s risk is only 50% and not 100% as it is now with Calypso.

So we player would be forced to move to the new planets if we want to play this game because it is the end off planet calypso.

i dont see how someone would buy in only to close Calypso which this seems to imply. clearly they do feel the need for cash, but bear in mind most actioned withdrawals are covered by deposits as they occur, not cash.

im not sure that MA's liability changes as people use the other planets either, the deposits/withdrawal all go though MA still, its only decay revenue that is split.

 

[billairboy]

The 6m Cash sound less rosie as it seems, if you read the report you will see that this money will be paid until 2013 (or so... don't remember) in installments. To me that sounds like some sort of Buyout... which fair ennough, means someone believes in the Project. Still, I don't think the few 100k that MA will get in 2010 will be ennough to stabilize the cash flow.

No, they get the money in 2010 and at the start of 2011.
"The remaining purchase price, five million USD, shall be transferred to First Planet Company in four installments, October 15, 2010, January 15 2010, April 15 and 15 June 2011"
So they should get around 16-18 MSEK in 2010 if the deal is completed, and 25-30 MSEK in 2011.

 

[AJack10600]

No, they get the money in 2010 and at the start of 2011.
"The remaining purchase price, five million USD, shall be transferred to First Planet Company in four installments, October 15, 2010, January 15 2010, April 15 and 15 June 2011"
So they should get around 16-18 MSEK in 2010 if the deal is completed, and 25-30 MSEK in 2011.

Ok thanks, I take note of that well that should at least allow to balance out the negative cash flow. If they keep burning at this rate though then it's a drop on the hot stone.. More Planet Partners and new Costomers are needed ...

 

[aridash]

The 6m Cash sound less rosie as it seems, if you read the report you will see that this money will be paid until 2013 (or so... don't remember) in installments. To me that sounds like some sort of Buyout... which fair ennough, means someone believes in the Project. Still, I don't think the few 100k that MA will get in 2010 will be ennough to stabilize the cash flow.

its $1m initally once due dilligence has completed, followed by $1.25m in October, Janurary, April and June.

i apprieciate some professionally trained insight to the account and take onboard the observations. if i seem dismissive its because of my nature .

when i first saw the report i thought it wasn't a pretty picture. but then, maybe clining on to some hope, it just seems that outside money wouldn't be coming in if it wasnt a viable investment. i give alot of weight to the opinon of $6m dollars. my point about the financial reports looking in the past was in the context, they of course indicate and guide to the future, but the facts contained are inherently historical. the trend isnt good, but are we at the end of that now?

As far as i can see much of the cash spent is in the investment and development of the future of the platform, rather than simple cash burn (i remember the dot com companies where cash was burnt at millions a month on marketing: dead money). is it wrong to consider this? i see noone looking at the accounts on this angle and find that difficult as it seems important indictor to the future.

 

[billairboy]

Ok thanks, I take note of that well that should at least allow to balance out the negative cash flow. If they keep burning at this rate though then it's a drop on the hot stone.. More Planet Partners and new Costomers are needed ...

Yes, they most start increase the amount of players, because now when more planets goes online, those planets most have a share of the cash to pay their expensivies too. With the right promotion i think they would be able to singificantly increse the number of players in the commning year.