Business Description: Optimal Group, Inc. (OPMR) operates as a payments and services company primarily in North America and the United Kingdom, as well as in Ireland. Through its wholly owned subsidiary, Optimal Payments, Inc., the company provides technology and services that businesses require to accept credit card, electronic check, and direct debit payments. The company processes credit card payments for card-not-present and card-present transactions, including Internet businesses, mail-order/telephone-order merchants, and retail point-of-sale merchants. Optimal Group also processes checks and direct debits online and by telephone. In addition, it processes online gaming transactions originating from the non-U.S. consumers. The company processes these online gaming transactions through the use of credit and debit cards, electronic debit, and an electronic wallet. Optimal Group markets its services directly, as well as through independent sales agents and strategic partnerships. Its customers primarily include small to medium-sized merchants, as well as consumers who utilize the company's electronic wallet offering. The company was founded in 1984 and is headquartered in Montreal, Canada.
Story: OPMR was a $20 stock in late 2005, early 2006, when it looked like a solid business. However, for no apparent reason at the time, it started sliding and in October 2, 2006, the reason came to surface: the Unlawful Internet Gambling Enforcement Act of 2006.
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=42227;image)
This new Law cut the company's revenues nearly in half. But costs were also greatly diminished, so the company didn't lose as much money as one would initially think, given a 50% haircut in revenue from one quarter to the next. The stock kept falling anyway, I believe because people just paid attention to the new Law and if internet gambling for North Americans would come back or not (I was one of this people). OPMR fell so much its valuation went below cash levels. On last Wednesday's close OPMR was worth $81 M, while its latest balance sheet says the company has $142 M in cash and cash equivalents. If we take out from the cash balance the company's total debt of $46 M, we're still left with a $96 M value, or $4.02 net cash per share. The stock closed at $3.59 on Friday.
Since OPMR was so obviously undervalued, twelve corporate insiders didn't have a problem in buying options to be converted to shares at $4.21 each. (http://www.sec.gov/cgi-bin/browse-edgar?company=&CIK=opmr&filenum=&State=&SIC=&owner=include&action=getcompany)
Not satisfied with the options he bought at $4.21, and because the price in the open market was even lower, the CFO bought more shares in the open market (http://www.sec.gov/Archives/edgar/data/1015923/000128969007000002/xslF345X02/primary_doc.xml).
Of course, the company has been lobbying for the return of internet gambling for US citizens, but it will probably take a very long time for the Law to change, if ever. So they went ahead and did something with their big cash pile, which was a relatively big acquisition of a private company:
«On November 7, 2007, we completed our previously announced acquisition of substantially all of the assets of WowWee Limited, a privately-held Hong Kong-based developer, marketer and supplier of technology-based, consumer robotic, toy and electronic products, as well as substantially all of the assets of WowWee Marketing, with offices in La Jolla, California, and WowWee Group, with offices in Montreal, Quebec. WowWee Marketing and WowWee Group were service providers to WowWee Limited in the operation of its business. This acquisition was completed at an approximate cost of US$67 million, US$55 million of which was incurred in satisfaction of the cash portion of the purchase price, US$10 million of which was incurred through the issuance of 2,169,197 of our common shares, at a price of US$4.61 per share, in satisfaction of the stock portion of the purchase price, and the balance of which was incurred upon the issuance of a warrant with an estimated fair value of approximately $2 million to purchase up to an additional 820,000 of our common shares at a price of US$5.56 per share.
We will account for this acquisition using the purchase method and the results of WowWee will be consolidated with those of the Company from the date of acquisition, November 7, 2007.
WowWee, with a team of design engineers based in Hong Kong and La Jolla, designs, develops, markets and distributes technology-based consumer products and toys. WowWee is best known for its line of Robo-branded consumer robotic products.
WowWee's products are sold through its direct sales channel as well as through international distributors. Approximately 65% of its products are sold in North America, with the balance being sold internationally.
In 2006 and 2005, WowWee's revenues were approximately US$117 million and US$131 million, respectively, and earnings before interest, taxes, depreciation and amortization were approximately US$5 million and US$27.5 million, respectively. The results of WowWee are subject to seasonal variability with a significant portion of revenues generated in the third and fourth quarter of each calendar year.»
I don't know how WowWee is doing now, but judging from the insiders confidence in buying shares above the current market price and the CFO buying in the open market, I believe this is a good hint that the company is doing well.
The company has also been buying back its own shares, benefiting from the price decline. The diluted share count was reduced from 25,558,243 in Q3 2006 to 23,866,604 in Q3 2007 and the company plans to buy back an additional 1.3 million shares:
• Optimal Group Publishes Notice of Intention in Respect of Normal Course Stock Buyback Program (http://biz.yahoo.com/iw/071115/0329420.html)
Marketwire (Thu, Nov 15)
I'm not sure what the upside for the stock is, because I don't know how well WowWee has been doing or its prospects, but insiders activity tells me we're near the bottom for OPMR and the stock should rise from here. This information is enough for me to buy OPMR.
Trading Plan:
Buy OPMR, 6.66% of capital.
strange///with Etrade I get this message from my buy page, I'll have to call
Enter Order: Stocks
Orders for this security cannot be accepted online at this time. For assistance with placing this order, please call Customer Service at 1-800-ETRADE-1 (1-800-387-2331).
David, I am curious why you think it is the right moment to get in; do you believe the stock is unlikely to continue sliding. Sorry, if I missed this info in the text above. Thanks.
Quote from: berloga on December 03, 2007, 09:12:20 AM
David, I am curious why you think it is the right moment to get in; do you believe the stock is unlikely to continue sliding. Sorry, if I missed this info in the text above. Thanks.
Yes, since insiders are buying around current levels I don't think the stock will continue sliding.
But it's possible, everything is possible in the stock market. I'm talking about odds ... I mean, what's the possibility of OPMR going down further, given that it is valued below net cash levels (before the WowWee acquisition) and insiders are buying? And what is the possibility for it to go back up to $6-$7 over the medium term? I believe the latter is much more probable, but you be the judge. If you believe in technical analysis perhaps you should avoid this pick, since the trend is still bearish. Perhaps at $6 technical analysts will find it attractive, I hope so ;D
I agree with David.
Technically speaking, technical analysis is also well known for its self-predicting prophecies.
:)
Ok, essentially what I bought here is now a toy company:
http://www.wowwee.com/
I'm not sure what to think of these toys. I believe the Flytech Drangonfly technology (http://www.flytechonline.com/Watch.html) has a lot of potential ... imagine if instead of an insect that was SpiderMan or SuperMan ... it would be really cool (an insect is also cool).
Time Magazine wrote it's one of the best inventions of 2007:
November 12, 2007
WowWee's Award-Winning FlyTech Dragonfly Named one of TIME Magazine's Best Inventions of 2007 (http://www.optimalgrp.com/press_room/PressReleases/11_12_2007_E.pdf)
hmm, if it was invented in 2007, it didn't exist in 2006 ... is this a hint that 2007 results are better than 2006? Retail price at $49.99 seems cheap, considering the technology.
We don't know much about WowWee's financial condition, so the investment is based on the strength of the balance sheet and insider's actions in the open market. 12 insiders paid $4.21 for their shares in November 12th, 2007 (the stock was around that price at the time) and the CFO recently bought 30,000 shares in the open market at $3.42 and $3.43.
We know the following about WowWee:
• Optimal Group to Acquire WowWee (http://biz.yahoo.com/iw/070927/0307709.html)
Marketwire (Thu, Sep 27)
«In 2006 and 2005, WowWee's revenues were approximately US$117 million and US$131 million, respectively, and earnings before interest, taxes, depreciation and amortization were approximately US$5 million and US$27.5 million, respectively.»
Results seem to be trending down, but one can't make a trend using just two data inputs. OPMR's market cap is $86 M, so if 2007 resembles 2006, and just considering WowWee, it is trading at 17 times EBITDA. If 2007 resembles 2005, it is trading at 3.1 times EBITDA, a big difference.
We'll know about WowWee's current results in the 4th quarter earnings release, probably in February 2008. In the meantime I'll keep the faith based on insider's purchases.
Oh boy, I didn't put the right chart here ... only today Bourbon warned me through private message (thanks Bourbon :)). Guys, whenever there's a mistake, please don't hesitate to point it out.
OPMR ... insiders bought above the current price, the CFO bought around yesterday's close. The company used to have $4 plus in net cash per share, but now it made an acquisition. Nobody (except the insiders) know how WowWee has been doing, and insiders have been buying. That means they see today's share price for OPMR as a bargain. And who knows better than them? They're the only ones in the know ... the only thing sellers know is the chart is bearish, but you know that can change pretty quickly.
Just give us a white marubozu and people will believe.
I'll keep holding OPMR for the long term.
The Robosapien toy has been around for a while and last year my 8 year old son HAD to have one. It was, like most toys, a fad, and after last year's holidays it was discounted everywhere. I didn't see anything that Wowwee makes that really juiced up my kids' enthusiasm this time around. My daughter loves Hannah Montana and so I'm sticking with JAKK and not getting into OPMR for the time being...
I would have to ask David what brought him to this stock in the first place, admittedly not knowing much about Wow wee. Is it solely because insiders bought some stock? Whats the WOW factor here? I certainly can't see it. Theres no convincing story on this one, why would anyone buy?
And what about "diworsification"?
Quote from: capricho on December 06, 2007, 12:11:00 AM
The Robosapien toy has been around for a while and last year my 8 year old son HAD to have one. It was, like most toys, a fad, and after last year's holidays it was discounted everywhere. I didn't see anything that Wowwee makes that really juiced up my kids' enthusiasm this time around. My daughter loves Hannah Montana and so I'm sticking with JAKK and not getting into OPMR for the time being...
Thanks for the information capricho. I also wasn't all that excited about WowWee's portfolio of toys. The market didn't like it either, as you can see on the chart below.
QuoteI would have to ask David what brought him to this stock in the first place, admittedly not knowing much about Wow wee. Is it solely because insiders bought some stock?
There's more to it. Before the acquisition the company had $4.03 net cash per share. Also, after the Law banning internet gambling for Americans, everybody thought OPMR would basically run out of business ... this is why it was trading near net cash levels. But guess what? Over the last couple of quarters OPMR was profitable (just $0.03 per share, but ...)
QuoteWhats the WOW factor here? I certainly can't see it. Theres no convincing story on this one, why would anyone buy?
You should ask that question to the 12 insiders and the CFO of the company. I buy because I see the stock is very cheap and they're buying. Also, the number of shares outstanding has been reduced, this company is buying back shares.
QuoteAnd what about "diworsification"?
I think this is different BigSully1, due to external factors, the company's core business was almost destroyed ... they had to do something with their big cash pile.
I'll keep holding OPMR.
OPMR has been responding negatively to the 50 days simple moving average, as you can see on the chart below. This SMA currently stands at $4.28.
If I were a technician I would probably take profits there, but as I look at other factors, like for example the price insiders paid to buy shares recently ($4.21), I don't feel like taking profits so low.
There's a good post on Yahoo Finance:
Why OPMR bot WOWWEE – top toys for 2007 (http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_O/threadview?m=tm&bn=13437&tid=24480&mid=24480&tof=11&rt=2&frt=2&off=1)
It seems the Flytech Drangonfly, launched in March 2007, is getting traction. Maybe it will be enough to replace Robo Sapiens as the company's hot toy ... if Wow Wee manages to make anything near what it did in 2005 I would say OPMR bought it very cheap.
We'll find out when the company reports 4th quarter results. OPMR bought WowWee for a reason, and insiders also had their reasons to buy shares at $4.21.
I'll keep holding OPMR.
OPMR was the sole green light of the Main Portfolio yesterday. We have to give the stock some credit for that. But, until we crossover above the 50 days SMA we're not out of the woods in technical terms, as we've just seen with SIX.
If I were a technician I certainly wouldn't buy OPMR here. But I'm not, because technicians are always changing their opinions and can't invest for the long term, because stocks are too volatile and the charts give them many false signals.
Now pay attention to the fundamentals and read the 3rd quarter earnings press release:
• Optimal Group Announces Third Quarter 2007 Results (http://biz.yahoo.com/iw/071106/0325157.html)
Marketwire (Tue, Nov 6)
"Adjusted earnings" were $0.13 for the quarter. GAAP net income was just ($0.02) per share, a $413 K loss, not a big deal. Adjusted means "without the mess that will soon be over" to me. And that's $0.52 EPS for a full year, still without the Wow Wee acquisition, which I believe is a profitable company, or at least it has been profitable.
I'll keep holding OPMR, despite the chart.
OPMR couldn't cross above the 50 days SMA at its first attempt. The stock still has some work to do, but I'm confident that the low was made due to the various factors I've already explained.
Not much else to do but keep holding and waiting.
The 50 days SMA continues to reign in OPMR's land. If you believe in charts perhaps it is a good idea to wait for a bullish breakout above the 50 days SMA before buying this one. Currently that moving average stands at $4.16.
I got in at $3.59 and sure hope that you or anyone else waiting for a technical signal will end up paying more than I did for their shares. ;D
Anyway, the problem I have with following the chart isn't the entry timing, but the trembling hands after I buy. You see, if I were to buy due to a bullish crossover between the price and the moving average, to be coherent, I would sell whenever there's a bearish crossover, that is, whenever the price falls below the 50 days SMA. Acting this way I could never hold a stock for the long term and would be doomed to be a short term trader, always getting in and out of stocks, because no stock ever goes straight up without periods of weakness.
Moving away from this philosophical discussion on technical analysis, I see that WowWee's products aren't distributed in Europe (http://www.robopetonline.com/where.html), currently the largest consumer market in the World. They're not for sale in China or Japan either.
It appears to me that OPMR's first objective when they announced the WowWee acquisition makes sense:
«- Expanding sales and distribution through a broadening of the sales channels, particularly outside North America and in emerging markets;»
Insiders believe in OPMR and bought many shares around current levels. I'm also a believer, I'll continue holding OPMR for the long term.
I'v noticed at my local ToysRUs and Target stores that the WowWee products are just sitting on the shelves and seem to get little interest from customers. Could just be a fluke. From personal experience my two kids are not interested in any of the 'Robo' toys.
Quote from: capricho on December 19, 2007, 08:12:02 AM
I'v noticed at my local ToysRUs and Target stores that the WowWee products are just sitting on the shelves and seem to get little interest from customers. Could just be a fluke. From personal experience my two kids are not interested in any of the 'Robo' toys.
Thanks for the information capricho :)
I think my two kids would love WowWee's toys, but they're not available here in Portugal, nor in Europe for that matter.
I fully understand and agree with your assessment of WowWee's current condition capricho. The company probably isn't in good financial shape, as its robo toys are out of fashion. I think this is why the owners of the company sold it for just $65 M. In 2005, when the company had $27.5 M EBITDA, I think OPMR would have to pay at least 10 times EBITDA, that is, $275 M to acquire WowWee.
I think that just a better distribution and marketing campaign could make out of fashion toys in the US, in fashion toys in Europe and Japan, for example, since they weren't for sale here before (even though I admit kids aren't as fans of dinosaurs like in the past).
QuoteMy daughter loves Hannah Montana and so I'm sticking with JAKK and not getting into OPMR for the time being...
Yeah, sure, Hannah Montana is hot now and I love JAKK. Robosapiens is out of fashion ... but, remember, JAKK is a $700 M market cap company (it should be double) and WowWee was bought for $65 M. And you have to consider the company has a wonderful technology, robo-toys will always be wanted, the company just needs to get out of dinosaurs and make something like a robo-spiderman, for example (everything related to spiderman is very hot right now here in Europe). WowWee also needs to expand its geographical reach.
Take for example MCZ, another company that makes toys (well, they make customized controllers for PlayStation). That's valued by the market at $60 M. I believe WowWee is worth a lot more than MCZ.
I'll keep holding OPMR for the long term.
Just to add another geographic input. Wowee already market a Spider Sapien (based on Spider man) and Homer Sapien (based on, well yep Homer Simpson) Look at the link http://www.engadget.com/2007/01/24/wowwee-cashes-in-with-new-spidersapien-and-homersapien/
These are in the shops in Australia. By the way the dragonfly RC is sold out where ever I look for it. Very popular here. I wanted one, but can't get it for Xmas :'(
Quote from: AussieTrader on December 20, 2007, 07:30:08 AM
Just to add another geographic input. Wowee already market a Spider Sapien (based on Spider man) and Homer Sapien (based on, well yep Homer Simpson) Look at the link http://www.engadget.com/2007/01/24/wowwee-cashes-in-with-new-spidersapien-and-homersapien/
These are in the shops in Australia. By the way the dragonfly RC is sold out where ever I look for it. Very popular here. I wanted one, but can't get it for Xmas :'(
It's case to say WOW Aussie, awesome information!!!
So they're already doing what I thought they should do ... and that HomerSapien is cool 8)
It looks like WowWee can turn anything into a robot ... it just has to do like JAKK does and pursuit the hot toys ... for example, they could do an Hannah Montana robot if they wanted and bought the permits.
I'm absolutely confident we have a long term winner here. And if you're concerned about the short term, consider insiders have been buying around current levels and Q4 is probably the strongest quarter for WowWee (well, I'm not sure about that, JAKK's strongest quarter is Q3 - but Q4 is the 2nd strongest).
Again, thanks a lot Aussie :)
I think robotic toys are very cool if they address certain interests in kids. The problem is that kids lose interest over time. However, since kids grow fast, they lose interest in many things as they acquire new skills and learn. My daughter was happy about her robotic dog on leash that she could walk, pet, cuddle with. Now, the dog is in my way all the time! But check out these RoboPandas! They are real cool. I think, first off, a robot must be an eye catcher. Second comes the functionality. The more it does, the better. I think robots with adaptive learning algorithms built in are very special. They help kids better develop their communication skills. Japanese are famous for that.
http://robotgossip.blogspot.com/2007/01/wow-wee-robopanda-and-roboquad.html
My business partners, two grown 60-year old men, came in the office today with the robotic dragonfly. They acted like two 5 year olds with this thing. I think the demographics for this toy needs to be adjusted.
Quote from: capricho on December 20, 2007, 07:54:35 PM
My business partners, two grown 60-year old men, came in the office today with the robotic dragonfly. They acted like two 5 year olds with this thing. I think the demographics for this toy needs to be adjusted.
Lol, I had a good laugh the first time I read this post and now again. Thanks for the information capricho ... I guess you're starting to be a bit less pessimistic about this pick, right?
Fundamentally, it appears to me that WowWee has some cool toys and some others that are out of fashion, at least in the US. Probably, even though the Drangonfly robot has been selling well, that won't be enough to make the company profitable if we consider a full year of operations. However, the technology to turn everything into a robot is there and as berloga says, robo toys are attractive and have value.
There's also a problem/opportunity in WowWee's business: the company hasn't been distributing into vast areas of the World, mainly Europe, most of SouthEast Asia, Japan and South America. The company's sales could triple if they just expand their distribution network. This is where OPMR with its deep pockets comes in.
I would say that WowWee's 2007 wasn't great, but 2008 is very promising.
Technically, OPMR is knocking on bullish territory's door ... it just need to cross above the 50 days SMA, currently at $4.07. If we could close above $4.19 today it would be great ... if not, well, patience, fundamentals will support and eventually push the share price higher.
I'll keep holding OPMR for the long term.
OPMR isn't just cheap, it has huge upside potential, considering the products WowWee will launch in 2008:
Breakthrough ''Micro-GPS'' Solution from Evolution Robotics(TM) Debuts at CES, Featured on WowWee's New Rovio(TM) Robot
NorthStar(R) Autonomous Navigation System Demonstrated Live on WowWee's Revolutionary New Rovio Telepresence Robot, with More Products Scheduled for 2008 and 2009
Jan 7, 2008 7:00:00 AM
Copyright Business Wire 2008
LAS VEGAS & PASADENA, Calif.--(BUSINESS WIRE)--
Evolution Robotics, Inc. today announced the introduction of a major breakthrough that marks the start of a new era of "super smart" robots for the consumer market. For the first time publicly, the company unveiled its NorthStar 2.0 system, which enables robots to be truly aware of their environment and perform everyday tasks with complete autonomy. The first product to use NorthStar will be WowWee Group Limited's new Rovio(TM) telepresence robot, which debuts at the Consumer Electronics Show (CES) this week in Las Vegas. WowWee, an Optimal Group company (NASDAQ:OPMR), is a leading designer, developer, marketer and distributor of innovative hi-tech consumer robotic and entertainment products.
NorthStar works like a combination GPS, RADAR and autopilot system rolled into one. It's designed to operate in everyday places like a home or office. So instead of showing you what exit to take on the highway, it guides your robot along a route that you establish, i.e. from your living room to a specific location in the kitchen. The system also represents a major breakthrough in price, coming in at 1/100th to 1/1000th the cost of equivalent systems used in research and industrial applications.
"These are aerospace grade technologies being introduced at consumer prices," said Dr. Paolo Pirjanian, president and CEO of Evolution Robotics. "NorthStar will have a very profound impact on the robotics market, starting with new products in 2008 and rapidly expanding in 2009."
The list of new products in development includes:
-- a new generation of intelligent floor care robots that clean
better, faster and far more efficiently than any product
currently on the market
-- super smart toys that interact with kids at blazingly fast
speeds and bring video game action to life into the real world
-- telepresence robots (such as the new WowWee Rovio robot) that
allow the user to connect to the home or office while away and
check if everything is ok
Visitors to WowWee's booth at CES will be able to see NorthStar in action on WowWee's Rovio robot. Demonstrations include logging onto a Rovio robot located 215 miles away in Evolution Robotics' offices in Pasadena and telling it where to go with a single click of a mouse. Rovio robot's built-in camera will broadcast back live video as NorthStar autonomously guides the robot along its course to different locations.
"NorthStar is clearly a market changing technology and we're very proud to have WowWee's Rovio robot lead the way," said Davin Sufer, CTO of WowWee Group Limited. "This is the first of many products we plan to launch using NorthStar and I can only say to our customers, prepare to be amazed."
With NorthStar, Rovio robot will be able to:
-- let you drive the robot with shortcut "go-to" commands, (i.e.
go to the kids' room) to make it easy to control the robot
remotely over the web or from your mobile phone
-- operate in "patrol mode" and automatically send you pictures
of specific locations you want to check, such as making sure
your dogs have food in their bowl each morning, or that they
weren't sleeping on the living room couch again
-- autonomously guide itself back on course if your kids pick it
up and move it
-- navigate to its charging station from anywhere in the house,
and dock with pinpoint accuracy, when its batteries run low
"Rovio robot is smart enough to give the Mars Rovers a run for their money," said Dr. Pirjanian, who worked on NASA robots while at JPL. "We are very excited to be a strategic partner with WowWee and working together to bring robotics into a new era."
Rovio telepresence robot will be available in the second half of 2008, at a retail price of $299. For more information and to see the latest WowWee products, please visit www.wowwee.com.
NorthStar represents the first in a line of breakthrough, low cost robotic components Evolution Robotics is developing to bring smarter robots to the mass market. For more information on NorthStar and other solutions from Evolution Robotics, please go to: www.evolution.com.
I think Rovio is a great product and there are many more possibilities for this "robots for the consumer" market.
As for the 14% low volume drop on Friday's session ... :-X
I'll keep holding OPMR for the long term.
MVIS also rocking at CES Vegas.
Quote from: stocky on January 07, 2008, 10:26:52 PM
MVIS also rocking at CES Vegas.
Yes, up 4% yesterday. That Pico Projector looks like an awesome product, but MVIS fundamentals are lousy. The company has been losing an immense amount of money each quarter and it has been printing new shares in a big way (http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=mvis&lstStatement=10YearSummary&stmtView=Ann) to cover the losses. You see 42.9 million shares outstanding at the end of 2006, but 9 months later it was already 56 million. I don't like that stock stocky, but thanks for the information :)
QuoteAs for the 14% low volume drop on Friday's session ... :-X
It was followed by a 14.8% rally ;D
The fact that WowWee can turn anything into a robot and the micro-GPS capability announced yesterday opens a vast number of possibilities for home-robots.
This is an anticipated trend for 2008:
«
3. The year of the home robotWe've all grown up watching visions of home robots on TV -- from "Lost In Space" to "The Jetsons" to "Gigantor." Admit it. You've always wanted a robot wandering around, making conversation and doing your chores.
Although a few home robot products have emerged over the last two decades, they've all been either too dumb or too expensive for broad consumer use. Most robots available today are either niche products for hard-core enthusiasts and programmers, or simple children's toys that everyone loses interest in after a few days of play.
But 2008 will be the year when very intelligent and very affordable home robots go mainstream, thanks to a brilliant new idea: Connect the robot to a home PC via Wi-Fi, and let the PC serve as the robot's brains. This innovation means that home robots can cost a few hundred dollars, instead of a couple thousand.
One robot that could come out by late 2008 or 2009 is Hanson Robotics' Zeno. When finished, Zeno will be able to walk, talk, express "emotions," make eye contact with you, learn your name and what you look like, and greet you by name when you walk into the room.
Sony is rumored to be planning the resurrection of its AIBO robot dog, but with one very major difference: Instead of carrying around a robot brain internally, AIBO will connect via Wi-Fi to a nearby Sony PlayStation. The robotic pooch will also have a Webcam on its forehead. According to the rumor, the new AIBO PS will respond to voice commands, and also guard your home, e-mailing you photos of any unauthorized intruders.
Whether these two products actually ship -- and whether they ship in 2008 -- remains to be seen. But the idea of using a home PC as the brains of a robot via Wi-Fi is obviously superior to trying to sell $2,000 home robots. Look for Wi-Fi-based robots emerging from small companies this year, too.»
As for WowWee's Rovio:
«Visitors to WowWee's booth at CES will be able to see NorthStar in action on WowWee's Rovio robot. Demonstrations include logging onto a Rovio robot located 215 miles away in Evolution Robotics' offices in Pasadena and telling it where to go with a single click of a mouse. Rovio robot's built-in camera will broadcast back live video as NorthStar autonomously guides the robot along its course to different locations.
"NorthStar is clearly a market changing technology and we're very proud to have WowWee's Rovio robot lead the way," said Davin Sufer, CTO of WowWee Group Limited. "This is the first of many products we plan to launch using NorthStar and I can only say to our customers, prepare to be amazed."»
$299 for a robot that goes where you want it to go through a click of a mouse and film things that can be seen in your computer seems like a great product. I wonder if in the near future it will be possible to make a robot get us things ... for example, I'm here writing, but I need a book standing in the living room ... how about directing the robot through this laptop so that he gets and brings the right book to me? This seems much closer now, because if the robot has a built in camera, and if I can see what he's "seeing", I could click on the object of my desire and possibly he could understand it ... I don't know about this, but definitely, a vast number of possibilities exist and WowWee is at the center of the "home robot" revolution.
A lot of potential for just $65 M. I would say OPMR made an awesome deal when buying WowWee.
I'll keep holding OPMR for the long term.
OPMR was the second biggest loser of the Main today, with a 8.1% decline. This was on relatively low volume of 87,900 shares changing hands.
Talking about more meaningful numbers, there was a form 13 filed with the SEC today (http://www.sec.gov/Archives/edgar/data/902367/000116923208000182/d73332_sc13g-a.txt) showing Blair William & Co now owns 2,519,381 OPMR shares, or 9.68% of the company.
The last time they filed a similar form was in January 17, 2007, when they held 2,479,421 shares (http://www.sec.gov/Archives/edgar/data/902367/000116923207000225/d70449_sc13g.txt). OPMR closed at $8.97 that day.
OPMR's current market cap is (2,519,381/0.0968)*$4.06 = $106 M.
Before paying $65 M for WowWee, OPMR had $113 M in cash and $52 M in total debt. The stock was this cheap because investors thought it would lose a lot of money going forward, due to the US ban of online gambling (now I wonder if the reason that led me to sell GIGM - a German ban of online gambling - isn't a cause for concern in OPMR's case too. At first sight I don't think so because OPMR is basically WowWee now, the payments side of the business probably won't make or lose a significant amount of money going forward).
I believe WowWee will be worth significantly more in the future, because there's an emerging trend of home-robots and the company has the technologies to dominate that market, which can be huge. Moreover, as we've seen, WowWee hasn't been distributing into vast regions of the World (like, for example, Europe, Japan and South America) and that's about to change with OPMR's capital infusion.
By the time consumers get the home-robots in the 2nd half of 2008 and investigate who makes those wonderful and cheap products, they'll find WowWee and OPMR's shares, hopefully a lot higher than where they are today.
Will OPMR ever go back to its all time high of $53, that is, will OPMR be a $1 B plus company sometime in the future? I believe it's possible.
WowWee's Award-Winning Flytech Line Unveils New Flyer, Honored at Consumer Electronics Show
2008 Line Recognized by National Media Outlets
January 10, 2008: 10:00 AM EST
WowWee, an Optimal Group company (NASDAQ: OPMR), today announced its newest addition in the award-winning Flytech line was honored at the Consumer Electronics Show (CES), just days after being unveiled. Flytech Bladestar(TM), an indoor flying machine with onboard navigation, was one of only 20 products awarded with an "Editor's Choice Award" by Popular Mechanics magazine as a technologically advanced innovation. In addition, WowWee's 2008 product portfolio, including the Flytech Bladestar flyer, has been featured on dozens of national, international and regional broadcast segments over the course of the four day CES event, highlighting the fact that WowWee continues to forge new categories in personal robotics and entertainment products that are imaginative, inventive and functional. Highlights include ABC's "Good Morning America," CNN and CNN "Headline News," MSNBC and Fox television.
FlyTech Bladestar(TM), a revolutionary indoor machine with unique sensor detection, is set to change helicopter flight as we know it today. The first flying toy with sensor-based navigation that enables it to glide itself through the air with two wings that spin with helicopter-like movement, the Bladestar flyer is made from ultra-light, flexible materials designed to be crash resistant. Built-in infrared sensors allow the indoor flyer to detect and avoid obstacles - consumers can even face-off two Bladestar flyers in a duel The Flytech Bladestar flyer has been featured on CNN, MSNBC, NY1 and CNET-TV live from CES.
The 2008 FlyTech line of indoor flyers will also feature a diverse collection of vertical flyers including the FlyTech(TM) Bat, the FlyTech(TM) Dragon and, new for girls, the FlyTech(TM) FairyFly, which has been featured in several broadcast segments in regional markets across the U.S. this week. In addition, the FlyTech(TM) Butterfly, which is also new for girls, FlyTech(TM) Mosquito and FlyTech Moth(TM) flyers feature a simple launching dock instead of a remote controller - the perfect introduction to flight for more novice flyers.
Other 2008 products recognized by leading media outlets include:
The Rovio(TM) robot, a revolution in home exploration and telepresence, is a WiFi enabled robotic webcam that moves in all directions with ease and can be controlled remotely using any web accessible device. The Rovio robot is also the first to feature the NorthStar® smart navigation and positioning system, which represents a major breakthrough in robotics. ABC's "Good Morning America" featured the Rovio robot in a segment on hot new consumer electronics. The Rovio robot was also featured in The New York Times online and on CNN and MSNBC.
Tribot(TM), the next generation of WowWee's award-winning Robosapien(TM) robot, is a three-wheeled personality-packed companion equipped with different play modes for hours of entertainment. Complete with distinct expressions and animated eyebrows, the Tribot robot features an omni-directional motion easily controlled by a tilt sensor remote control. CNN's Headline News, FOX, G4-TV and CNET-TV all featured the Tribot robot on reports about new innovations being introduced at CES.
Information about WowWee's product portfolio - including the latest products announcements for 2008 - are featured on www.wowwee.com.
Thanks for posting the following press release AussieTrader:
• WowWee's Award-Winning Flytech Line Unveils New Flyer, Honored at Consumer Electronics Show (http://biz.yahoo.com/iw/080110/0347045.html)
Marketwire (Thu, Jan 10)
WowWee is really committed to its "flying robot" technology, as it expands its line of products meaningfully:
«FlyTech Bladestar(TM), a revolutionary indoor machine with unique sensor detection, is set to change helicopter flight as we know it today. The first flying toy with sensor-based navigation that enables it to glide itself through the air with two wings that spin with helicopter-like movement, the Bladestar flyer is made from ultra-light, flexible materials designed to be crash resistant. Built-in infrared sensors allow the indoor flyer to detect and avoid obstacles - consumers can even face-off two Bladestar flyers in a duel The Flytech Bladestar flyer has been featured on CNN, MSNBC, NY1 and CNET-TV live from CES.
The 2008 FlyTech line of indoor flyers will also feature a diverse collection of vertical flyers including the FlyTech(TM) Bat, the FlyTech(TM) Dragon and, new for girls, the FlyTech(TM) FairyFly, which has been featured in several broadcast segments in regional markets across the U.S. this week. In addition, the FlyTech(TM) Butterfly, which is also new for girls, FlyTech(TM) Mosquito and FlyTech Moth(TM) flyers feature a simple launching dock instead of a remote controller - the perfect introduction to flight for more novice flyers.»
When the Fortune magazine talks about robots, 3 out of 7 are made by WowWee, look here:
Robots Galore (http://money.cnn.com/galleries/2008/fortune/0801/gallery.CES_robots.fortune/index.html)
OPMR's management is executing the following plan:
«- Expanding product design, development and production capabilities to produce an increased number of SKUs (stock keeping units) at varying price points;»
And if they also execute on the next part of their plan ...
«- Expanding sales and distribution through a broadening of the sales channels, particularly outside North America and in emerging markets;»
... what you have is a recipe for much higher revenues and profits in 2008 than in 2007.
OPMR holding strong above the 50 days SMA, which acted as a resistance for so long. Business outlook is very promising.
Nothing new on OPMR, still being supported by the 50 days SMA and with the upside temporarily limited by the $4.66 horizontal resistance level.
OPMR lost steam and is back down below the 50 days SMA. But if I like JAKK at $800 M market cap, I got love OPMR at $97 M. Just wait for those robots to hit the shelves this holiday season.
But, over the short term, it is possible that WowWee's results in the 4th quarter and 2007 were bad and OPMR goes down to retest the $3.28 support level, for a double bottom formation.
But I'm confident that the downside is limited and the long term upside is huge.
QuoteBut, over the short term, it is possible that WowWee's results in the 4th quarter and 2007 were bad and OPMR goes down to retest the $3.28 support level, for a double bottom formation.
Nice reaction to the $3.54 level. A higher low would be a positive signal, maybe we won't have to go as low as $3.28 in this bottoming process.
I'll continue holding OPMR for the long term.
OPMR will release results next Tuesday:
Optimal Group Sets Release Date for Fourth Quarter and 2007 Year End Results (http://biz.yahoo.com/iw/080304/0370500.html)
Marketwire(Tue, Mar 4)
I believe OPMR is a special situation, a company which completely changed its business model and I believe it is very cheap (trading below net cash levels before the WowWee acquisition). Moreover I like WowWee's products and potential.
I'll keep holding this one for the long term.
Results were released yesterday. Not great....
Mar 11, 2008 16:01 ET
Optimal Group Announces Fourth Quarter and 2007 Year-End Results
MONTREAL, QUEBEC--(Marketwire - March 11, 2008) - Optimal Group Inc. (NASDAQ:OPMR) today announced its financial results for the fourth quarter and year ended December 31, 2007. All references are in U.S. dollars.
Revenues for the fourth quarter ended December 31, 2007 were $37.6 million (which includes approximately $11.3 million related to the WowWee business segment acquired on November 7, 2007) compared to $33.9 million for the fourth quarter ended December 31, 2006.
Net loss in the fourth quarter ended December 31, 2007 was $31.6 million (which includes a goodwill impairment loss of $22.6 million that was recognized in the Optimal Payments business segment, resulting from a revision in its business forecast to reflect higher merchant attrition and lower growth expectations, and amortization of intangibles pertaining to transaction processing and cost of sales of $4.6 million) or $1.26 per share compared to net earnings of $2.8 million (which included amortization of intangibles pertaining to transaction processing and cost of sales of $3.0 million) or $0.11 per diluted share in the fourth quarter ended December 31, 2006.
EBITDA for the fourth quarter was $0.7 million or $0.03 per diluted share compared to EBITDA of $6.6 million or $0.27 per diluted share for the comparable period in 2006.
EBITDA is a non-GAAP (generally accepted accounting principles) financial measure calculated as earnings before investment income, taxes and depreciation and amortization and excludes the impact of impairment loss, non-controlling interest, stock-based compensation and discontinued operations. A reconciliation of Optimal's EBITDA is included in Annex A.
Revenues for the year ended December 31, 2007 were $123.3 million compared to $191.9 million for the year ended December 31, 2006.
EBITDA for the year ended December 31, 2007 was $8.5 million or $0.35 per diluted share compared to $43.0 million or $1.69 per diluted share for the year ended December 31, 2006.
Net loss for the year ended December 31, 2007 was $36.5 million (which includes the above-mentioned goodwill impairment loss of $22.6 million recorded in the Optimal Payments business segment and amortization of intangibles pertaining to transaction processing and cost of sales of $14.0 million) or $1.51 per share, compared to net earnings of $12.8 million (which included an impairment loss on intangible assets of $1.9 million and amortization of intangibles pertaining to transaction processing and cost of sales of $12.1 million) or $0.50 per diluted share for the year ended December 31, 2006.
Optimal's consolidated balance sheet remains strong. At December 31, 2007, the Company had:
- Cash and cash equivalents, short-term investments (including amounts held in reserve) and settlement assets net of customer reserves, security deposits and bank indebtedness, of $51.6 million or $1.99 per issued and outstanding share;
- working capital, excluding cash and short-term investments held as reserves, of $15.9 million; and
- shareholders' equity of $201.7 million, or $7.76 per issued and outstanding share.
Strategy
WowWee
The Company is actively focused on implementing the strategies outlined in the press release announcing the WowWee acquisition, in order to enhance the Company's growth and financial performance. These strategic initiatives include:
- Expanding sales and distribution through a broadening of sales channels, both in North America and overseas;
- Expanding product design, development and production capabilities to produce an increased number of products at varying price points. In 2008, WowWee will produce and market the broadest product line in its operating history;
- Broadening development initiatives into products that combine computer connectivity, utility and entertainment; and
- Embarking on branded entertainment, licensing, publishing and merchandising initiatives.
In the few months since WowWee was acquired by the Company, several objectives have already been achieved:
- A distribution relationship has been established with a leading third-party distributor and fulfillment partner;
- The WowWee sales and marketing plans have been restructured; certain personnel have been reassigned and additional sales and marketing professionals have been engaged;
- A redesigned WowWee website has been launched; and a new online store with greatly improved backend fulfillment will be added in the spring;
- The La Jolla, California creative design capabilities have been expanded and specific procedures to improve product design and packaging have been implemented;
- A third-party production and management team has been engaged to promote content across multiple media platforms embraced by young adults, with an emphasis on exploiting opportunities in the digital landscape; and
- "Store-within-a-store" concepts have been put into development with select merchants in North America.
WowWee now focuses on four distinct product lines:
- WowWee Robotics: its robo-branded consumer robotic product line that includes, amongst others Robosapien, Roboreptile and Robopet;
- WowWee FlyTech: its radio-controlled flight segment that includes its award-winning Dragonfly product;
- WowWee Alive: products based upon its highly sophisticated animatronic technology; and
- WowWee Technologies: a new consumer - facing group that is focused on the consumer electronics (CE) marketplace and applying certain existing WowWee technologies to the home and the workplace.
Optimal Payments
Optimal Payments continues to streamline its operations and to pursue a strategy of organic growth for its business to better leverage its existing capacity and infrastructure. In doing so, it has eliminated unprofitable business lines with the goal of generating consistent and ongoing cash flow and maximizing efficiency. While Optimal Group continues to operate in the payments segment, the Company has from time to time received expressions of interest from certain third parties interested in acquiring the payments business and has allowed investigation and review to be conducted.
U.S. Gaming Payment Processing
Following announcements by the U.S. Attorney's Office in the Southern District of New York relating to its investigation of the U.S. Internet gambling industry, the Company, in March 2007, initiated discussions with the U.S Attorney's Office and is in the process of responding to a voluntary request for information issued by the U.S Attorney's Office.
Conference call
Optimal will hold a conference call on Tuesday, March 11, 2008 at 4:30 p.m. (EDT). It is the intent of Optimal's conference call to have the question and answer session limited to institutional analysts and investors. The call can be heard beginning at 4:30 p.m. (EDT) as an audio webcast via Optimal's website at www.optimalgrp.com. As well, Optimal invites retail brokers and individual investors to hear the conference call replay by dialing (514) 861-2272 or 1 (800) 408-3053 access code #3254448. The replay may be heard beginning at 6:00 p.m. (EDT) on March 11, 2008 and will be available for five business days thereafter.
I didn't have these results on my news service, thanks for posting AussieTrader :)
The bad results were due to one time charges. Listening to the conference call there's reason to be optimistic about OPMR. Let me just give you a few highlights:
- The company is buying back shares. Bought 200,000 in Q4 2007;
- They said they expect more than $130 M in revenues coming from WowWee in 2008, versus $117 M in 2006 and a bit more than $100 M in 2007; they also said they expect WowWee to be profitable in 08;
- Management expects more than $8.5 M EBITDA coming from the Payments business in 08.
$73.7 M, which is the current market cap, seems quite attractive for this company with $51 M in cash, or $1.99 per share.
Anyway, "cheap" doesn't mean anything these days, as the chart looks bearish. But I wouldn't sell due to the 4th quarter results, that's the past, the future looks a lot more promising for this company and I'm not talking about 3 years from now but right now in 2008.
I'll go deeper in this analysis before tomorrow's open, got to leave now.
Good news out for OPMR yesterday:
New WowWee Flyer Flutters to Store Shelves This Spring (http://biz.yahoo.com/iw/080317/0375701.html)
Marketwire(Mon 8:30am)
I see several websites announcing availability of the product for sale in Asia and Europe (http://www.google.pt/search?hl=pt-PT&q=FlyTech+Butterfly&btnG=Pesquisa+do+Google&meta=). Some people also say they saw it at Wal Mart.
The price, which is $24 a piece, is cheap enough to attract parents. It's just a pity that the butterfly isn't controlled by radio (through a remote control), one just charges the toy, releases it in the air and then watch it fly.
Anyway, I think my 4 year old would just love it.
I'm enthusiastic about WowWee prospects and I'll continue holding OPMR.
OPMR's CEO bought shares in the open market, on Wednesday and Thursday:
Form 4 (http://www.sec.gov/Archives/edgar/data/1015923/000109667108000001/xslF345X02/primary_doc.xml)
The man is showing his confidence in WowWee. I'm also confident.
Interesting, the former CEO and Chairman of Marvel Studios is producing a motion picture inspired in WowWee's RoboSapiens:
"Robosapien: Rebooted": WowWee's Robosapien(TM) Robot Gets a Starring Role in a Feature Film (http://biz.yahoo.com/iw/080325/0378985.html)
Marketwire (Tue 8:30am)
If the film is successful it can bring meaningful revenues for WowWee.
OPMR closing back above $3.02. I never had any doubt about the fundamentals for this company and I expect a good 2008 for WowWee and OPMR.
I'll keep holding OPMR for the long term.
OPMR has been slowly coming back ... the CEO added to his holdings on weakness:
Form 4 (http://www.sec.gov/Archives/edgar/data/1015923/000109667108000001/xslF345X02/primary_doc.xml)
OPMR closed above $3.02, will it be able to cross the $3.28 resistance now?
Well, I don't know about "now", but I remain confident that OPMR will be significantly higher by year's end.
QuoteOPMR closed above $3.02, will it be able to cross the $3.28 resistance now?
Done. Now OPMR will face the 50 days SMA resistance and an horizontal resistance, both at $3.54.
fyi:
OPMR: Short Interest DN 12.4% to 237.0K at the End of Mar 2008
Wednesday, April 09, 2008 16:19ET
According to new short interest data from NASDAQ, short interest for Optimal Group, Inc (NasdaqNM: OPMR) DECREASED 12.4% to 236,984 shares as reported at month-end March, 2008.
Based on OPMR's 20-day average daily share volume of 97,338, it would require approximately 3 day(s) of buying to cover this short interest.
&
OPMR: New 52-Wk Low @ $2.720 dn 3.54%
Wednesday, April 16, 2008 10:25ET
This is the 1st 52 WEEK LOW alert for OPMR in the past 7 calendar days.
The share price for Optimal Group, Inc (NASDAQ NM: OPMR) reached a new 52-week low today, trading at $2.720, down $-0.100 (-3.54%) from its previous close of $2.820.
The Company's previous 52-week low of $2.750 was set 22 days ago on March 25, 2008.
One year ago, the Company's shares closed at $8.990. The price has declined more than 69 percent since then. At the time of this alert, the stock had traded 10,065 shares via 42 trades, 87.45% below it's 20day average of 80,176 shares.
chart:
This new 52-week low currently puts the stock:
12.48% below its 20day Moving Average of $3.108
20.47% below its 50day Moving Average of $3.420
26.37% below its 100day Moving Average of $3.694
Investors didn't like the following news:
• WowWee's Chatterbot(TM) Computer Accessories Stream Jokes, Dialogue, Comments About Your Virtual Life (http://biz.yahoo.com/iw/080415/0386761.html)
Marketwire (Tue, Apr 15)
Who would want a silly toy like this? It's sad enough to be alone all day with the computer, but laughing from a robot jokes sounds really depressive.
Anyway, this is just a product and doesn't change OPMR's fundamentals.
I'll keep holding.
I agree with you: standing alone all day in front of the computer is VERY depressive :)
Quote from: terainvestment on April 18, 2008, 12:22:18 PM
I agree with you: standing alone all day in front of the computer is VERY depressive :)
Especially on a public holiday like today. I wonder if it is also an holiday in Italy.
This "worker day" thing started in Chicago, but it is an holiday in Europe and not in the US. Well, but the US has the "labor day" holiday.
The owner of a coffee shop here in my hometown said a sarcastic joke: "here comes worker day holiday, the day when people who don't work ... take a break" ha ha ha >:D
Some good news out for OPMR yesterday, working with Disney on a new toy:
• Disney Marks Entry into Robotic Toy Market with New Line of Programmable Toy Robots (http://biz.yahoo.com/bw/080430/20080430005521.html?.v=1)
Business Wire (Wed 7:00am)
Funny, DIS put out the press release but OPMR didn't say a thing about it. Management isn't worried about pumping the stock over the short term ... I guess the company has been buying back some of its own shares on the quiet.
There's only one analyst covering OPMR and he rates it "strong buy" with a $6 price target :o
(analysis attached below)
I'll keep holding OPMR for the long term.
Hi David, yes in Italy today is holiday...Labour Party...even if the comunists were squeezed up (finally!!) in the last election just two weeks ago. :)
David, any update from your research tool?
cheers
O.
OPMR: Q1 EPS (32c) vs 1c Misses (11c) Est; Guidance In-Line with Consensus
Tuesday , May 06, 2008 16:03ET
QUARTER RESULTS
Optimal Group, Inc (OPMR) reported Q1 results ended March 2008. Q1 Revenues were $31.25M; +3.92% vs yr-ago; MISSING revenue consensus by -18.41%. Q1 EPS was (32c); -3,300.00% vs yr-ago; MISSING earnings consensus by -190.91%.
GUIDANCE
FY-08 Revenue Outlook [$230 - $250M]: For 2008, the Company currently anticipates consolidated revenues in the range of $230-250 million The FY-08 revenue forecast is in-line with current consensus estimates.
more detailed:
Optimal Group Announces First Quarter 2008 Results
Tuesday , May 06, 2008 16:01ET
MONTREAL, QUEBEC, May 6, 2008 (Marketwire via COMTEX) -- Optimal Group Inc. (NASDAQ:OPMR) today announced its financial results for the first quarter ended March 31, 2008. All references are in U.S. dollars.
Revenues for the first quarter ended March 31, 2008 consisted of revenues from both the Optimal Payments segment and the WowWee segment (acquired on November 7, 2007). The WowWee segment operates in an industry that is seasonal by nature and where a significant portion of revenues and corresponding cash flow are typically generated in the second half of the year.
Revenues for the first quarter ended March 31, 2008 were $31.3 million (which includes approximately $4.9 million related to the WowWee segment; due to seasonality, the first quarter is typically the weakest quarter of the year for this segment) compared to $30.1 million for the first quarter ended March 31, 2007.
Net loss in the first quarter ended March 31, 2008 was $8.0 million or $0.32 per share compared to a net loss of $5.7 million or $0.24 per share in the first quarter ended March 31, 2007. The level of net loss in the first quarter is directly attributable to the seasonally low level of revenue generated by the WowWee segment. Generally, the first quarter is the period of lowest shipments and revenues in the WowWee segment and the industry in which it operates and, therefore, will result in weak financial results due to fixed costs that are incurred.
EBITDA for the quarter ended March 31, 2008 was a loss of $2.7 million or $0.11 per share compared to EBITDA of $2.8 million or $0.12 per diluted share for the comparable period in 2007.
EBITDA is a non-GAAP (generally accepted accounting principles) financial measure calculated as earnings before investment income, taxes, depreciation and amortization and excludes the impact of impairment loss, non-controlling interest, stock-based compensation, discontinued operations and legal settlements. A reconciliation of Optimal's EBITDA is included in Annex A.
Optimal's consolidated balance sheet remains strong. At March 31, 2008, the Company had cash and cash equivalents, short-term investments (including amounts held in reserve) and settlement assets net of customer reserves and security deposits, of $42.3 million or $1.64 per issued and outstanding share; working capital, excluding cash and short-term investments held as reserves, of $11.9 million; and shareholders' equity of $193.9 million, or $7.49 per issued and outstanding share. The Company continues to evaluate potential acquisition opportunities and expects to grow the WowWee segment by executing on internal growth initiatives and by actively pursuing complementary acquisitions.
Stock Buyback
On November 6, 2007, Optimal announced its intention to renew its stock buyback program. In accordance with applicable Canadian tender offer rules, the Company may authorize the purchase of not more than 5% of its outstanding shares on a basis that is exempt from the legal requirement to make a formal offer to all shareholders. Accordingly, the number of shares that may be purchased for cancellation under the Company's buyback program over a 12-month period is limited to 1,300,000 shares, or approximately 5% of the 26,036,548 shares outstanding as at November 14, 2007.
Since November 21, 2007, the Company has purchased and cancelled 157,060 shares under its stock buyback program, including 103,660 shares purchased and cancelled during the first quarter 2008. All purchases under the buyback program have been made subject to the "safe harbor" daily volume limitations prescribed by applicable United States federal securities laws.
Preliminary Outlook for 2008
For 2008, the Company currently anticipates consolidated revenues in the range of $230-250 million with consolidated EBITDA in the range of $10-12 million. However, the Company remains cautious in the face of a weak economy, challenging retail environment and the difficulties affecting companies that manufacture in China. Due to the seasonality of the WowWee segment and the industry in which it operates, these anticipated results should be viewed as preliminary. Management anticipates that greater clarity relating to its operations and financial results will occur as the year progresses.
For its WowWee segment, based on current trends (and given the seasonal nature of the business), the Company anticipates year over year revenue growth for 2008 of approximately 25-30% with revenue in the range of $130-140 million. As at April 30, 2008, orders for product in the WowWee segment were approximately 25% ahead of the same date last year. Also, the Company continues to significantly invest to execute upon its growth strategies for the WowWee segment which may compress operating margins for 2008.
During the first quarter of 2008, the Company continued to implement its strategies for the WowWee segment. It continues to make significant investments in its sales and distribution, as well as marketing and promotion. The Company is also actively building out its online presence, enhancing the consumer's ability to experience and explore the Company's products through the Internet. As well, the Company is pursuing a program of developing and distributing products based on licensed properties. For 2008, the WowWee segment has developed the broadest and most dynamic product offerings in its history. These products have begun to be shipped in the second quarter of 2008.
For its Optimal Payments segment, the Company anticipates 2008 revenues to be essentially flat to slightly decreased year over year and in the range of $100-110 million. This can be attributed to lower merchant volumes from normal attrition and discontinuing business with unprofitable merchant accounts.
Optimal Payments continues to streamline its operations and to pursue a strategy of organic growth for its business to better leverage its existing capacity and infrastructure. In doing so, it has eliminated unprofitable business lines with the goal of generating consistent and ongoing cash flow and maximizing efficiency. While Optimal Group continues to operate in the payments segment, the Company has from time to time received expressions of interest from certain third parties interested in acquiring the payments business and has allowed investigation and review to be conducted.
QuoteDavid, any update from your research tool?
Let me check ... nope, at least, not yet.
As you posted, Q1 2008 results were out last night:
• Optimal Group Announces First Quarter 2008 Results (http://biz.yahoo.com/iw/080506/0394339.html)
Marketwire (Tue 4:01pm)
Management stressed a lot (three times in the press release) that results were very affected by WowWee's seasonality, with the 1st quarter being the weakest. WowWee sold just $4.9 M in Q1 of the $135 M expected in full year 2008.
Three more interesting notes from the press release:
1 - Company has been buying back its own shares:
«Since November 21, 2007, the Company has purchased and cancelled 157,060 shares under its stock buyback program, including 103,660 shares purchased and cancelled during the first quarter 2008.»
2 - WowWee is growing from the year ago levels:
«As at April 30, 2008, orders for product in the WowWee segment were approximately 25% ahead of the same date last year.»
3 - There's a hint that OPMR may sell its Optimal Payments division:
«While Optimal Group continues to operate in the payments segment, the Company has from time to time received expressions of interest from certain third parties interested in acquiring the payments business and has allowed investigation and review to be conducted.»
I still need to listen to the conference call, but won't have time to do it before the opening bell. But I'll write about it in tomorrow's update.
I like what I see in OPMR and I'll keep holding for the long term.
We'll have to be very patient with OPMR, because it seems 2008 will be an investment year in WowWee, which will probably compress margins.
Hopefully I'll lose this habit of getting in too early, as that poses a number of risks (and perhaps a lot of wasted time).
Anyway, OPMR's investment story hasn't changed and I'm very positive in WowWee's products and technology over the long term.
I'll attach an informative analysis of yesterday's results, made by B. Riley & Co.
I believe it would be a great development if OPMR were to sell its payments division, change its name to WowWee and completely focus in this business segment. It looks like that's in the cards and the payments division alone is estimated to be worth $2 - $3 a share.
Update:
OPMR technical layout is bearish for all time frames, and it continues to deteriorate in the short term.
Despite its fundamental prospects, we don't want to be holding it if another down swing starts, so we'll set a protective stop level a few cents below its recent lows.
Trading Plan:
HOLD OPMR with a stop @ $2.58
Update:
Just a quick chart update, OPMR failed to breakout the descending resistance and it's trading near the lows. Our stop is set a few cents below, so we'll be probably dropping this position, the market will decide.
Trading Plan:
HOLD OPMR with a stop @ $2.58
OPMR was stopped @ $2.58