3SOF

just fyi

GIGM IR ANSWER:

Dear Oliver:

FunTown is merging its China operations with T2CN, a leading game portal in China and operator of the #1 online sports game in China, FreeStyle. Last month we acquired controlling interest in T2CN, which has over 57 million registered users in China. We now plan to add FunTown's #1 MahJong and other Asian games to T2CN's sports portal.
We are very excited about our prospects to continue growing our platform in China and building shareholder value, and we look forward to providing updates on our business shortly.

Best,
Brad

-----Original Message-----
From: oliver
Sent: Wednesday, August 08, 2007 2:27 AM
To: [email protected]
Subject: Shareholder Request: GIGM Statement
Importance: High

Dear Mr. Miller,
as a shareholder I kindly ask you/GIGM to comment on the following new
published today:

Casual Game Portal FunTown Stops Operation in China
Tue, Aug 7, 2007 Games
Casual game portal Funtown announced that it will stop its operation in
mainland China starting from Aug 23. Formerly part of Acer Group, the
Taiwan based casual game portal was acquired by Gigamedia (NASDAQ:GIGM)
in 2006. Funtown China was launched in 2005 and currently offers 7
casual games including cards, pool and mahjong. Redline China believes
the closing of FunTown China indicates the fierce competition in the
casual games business, especially from competitors such as Tencent and
Lianzhong, who benefit from a large variety of game offerings and an
established player base.
link:
http://www.redlinechina.com/main/?q=node/305

There is a great uncertainty outside the investment community, a
clarification would be very helpful!

Thanks in advance for your answer

Oliver
(shareholder)

Nice breakout on the 30 minute chart with good volume.  If it can hold a close above say 10 with good volume, that might help solidify a decent rebound for the near future.  Of course any piece of news can kill a rebound.   

GIGM is moving up and it's a good buying opportunity.  Motley Fool still rates it as a bargain stock and a good buy.  David continues to hold it.  As of this writing, it's up .93 today and hopefully it already hit bottom.
Marie

also Roth update available now:
GIGM GigaMedia: Misinformation creates compelling buying opportunity - Roth (10.50 +1.04)

Roth notes that Redlinechina.com reported earlier this week that FunTown (GIGM's casual game portal) will stop its operations in China on Aug 23rd due to fierce competition in the casual games business. The firm says that after speaking with mgmt they would like to clarify some confusion on this news. First, they say GIGM is NOT closing down its FunTown China operations, but rather merging its China operations with T2CN. They say the co plans to offer FunTown's play-for-fun MahJong and other casual games on the T2CN platform going forward. The firm would also like to note that the majority of FunTown's rev currently comes from Taiwan, NOT mainland China. They say the co only recently began offering FunTown games in China and the rev wasn't meaningful.

la-onda,

Thanks for the info but you we already knew that thanks to you!!!!!!!

Looks like you made mgmt realize that they had to get some things cleared up.

Thanks again and applaud.

Brad

Quote from: la-onda on August 08, 2007, 09:30:29 PM
also Roth update available now:
GIGM GigaMedia: Misinformation creates compelling buying opportunity - Roth (10.50 +1.04)

Roth notes that Redlinechina.com reported earlier this week that FunTown (GIGM's casual game portal) will stop its operations in China on Aug 23rd due to fierce competition in the casual games business. The firm says that after speaking with mgmt they would like to clarify some confusion on this news. First, they say GIGM is NOT closing down its FunTown China operations, but rather merging its China operations with T2CN. They say the co plans to offer FunTown's play-for-fun MahJong and other casual games on the T2CN platform going forward. The firm would also like to note that the majority of FunTown's rev currently comes from Taiwan, NOT mainland China. They say the co only recently began offering FunTown games in China and the rev wasn't meaningful.

Awesome work la-onda

So, it seems misinformation was taking GIGM down, and down a lot. I hope that now that the truth is being revealed, GIGM claws back up.

But the biggest misinformation of all was the one perpetuated by Reuters, saying management expected a sequential revenue drop. I expect this misinformation to also be dismantled when the company reports 2nd quarter earnings on August 14th.

I'll keep holding GIGM.

GIGM rebounded strongly to touch the $10.94 resistance level, prior support, on reports saying that it's not closing its Fun Town website due to competition, but it is instead merging it with T2CN.

However, the chart and the general market jitters didn't allow GIGM to sustain its gains by the end of the session.

Anyway, GIGM's business and growth is practically independent from the economic cycle and I expect the company's European business and SouthEast Asia initiatives to keep growing strongly.

The stock is quite cheap at current levels in my view. I'll keep holding GIGM for the long term.

Another nice comeback for GIGM today.  This morning it was looking like a nasty candle day, but she came back in style.  The day chart is looking good for a rebound continuation.  Look at the nice breakout at the EOD and finish at the high of the day on the 5 min chart.  Only thing I don't like is earnings coming up next week.  If earnings were not for a few more weeks I think this bad boy could move up fast on momentum alone, but earnings make crazy things happen.  Not sure what I'll do yet.   

Please take a minute to note phases marked with a 1 and a 2 on GIGM's chart below.

Phase 1 happened because despite delivering revenue and earnings above expectations in Q1 results, GIGM's management said the following:

«We expect second-quarter revenue growth on a percentage basis to be lower than the percentage growth achieved in the first quarter.»

And several analysts downgraded GIGM as a reaction to this statement, saying "there's seasonality in GIGM's business" and Reuters even wrote "GIGM expects lower sequential revenues".

I clarified this with GIGM's management and what they said was: "slower growth between Q1 2007 and Q2 2007, when compared to the growth we've had between Q4 2006 and Q1 2007". And the growth the Gaming Software Business unit had in Q1 2007 was:

«First-quarter revenues in the gaming software business increased 198 percent year-over-year to $26.3 million from $8.8 million and by 33 percent quarter-over-quarter from $19.8 million.»

So, "slower growth" necessarily means something between 1% and 32% revenue growth on a sequential basis. Never a sequential revenue decline as it was mistakenly reported.

As for the phase 2 decline, it appears that was because of the news release La-onda posted the other day:

«Casual game portal Funtown announced that it will stop its operation in
mainland China starting from Aug 23. Formerly part of Acer Group, the
Taiwan based casual game portal was acquired by Gigamedia (NASDAQ:GIGM)
in 2006. Funtown China was launched in 2005 and currently offers 7
casual games including cards, pool and mahjong. Redline China believes
the closing of FunTown China indicates the fierce competition in the
casual games business, especially from competitors such as Tencent and
Lianzhong, who benefit from a large variety of game offerings and an
established player base.»

Apparently this wasn't true, the company replied:

Quote from: la-onda on August 08, 2007, 09:30:29 PM
also Roth update available now:
GIGM GigaMedia: Misinformation creates compelling buying opportunity - Roth (10.50 +1.04)

Roth notes that Redlinechina.com reported earlier this week that FunTown (GIGM's casual game portal) will stop its operations in China on Aug 23rd due to fierce competition in the casual games business. The firm says that after speaking with mgmt they would like to clarify some confusion on this news. First, they say GIGM is NOT closing down its FunTown China operations, but rather merging its China operations with T2CN. They say the co plans to offer FunTown's play-for-fun MahJong and other casual games on the T2CN platform going forward. The firm would also like to note that the majority of FunTown's rev currently comes from Taiwan, NOT mainland China. They say the co only recently began offering FunTown games in China and the rev wasn't meaningful.

The stock now has the phase 2 decline to recover and if I'm right about the 2nd quarter numbers, it will also recover from the phase 1 decline, to trade at least at $16 before the year's end (the stock closed at $10.8 on Friday). If the 3rd and 4th quarters are also strong, with Hellgate: London and Majhong for money coming into the play, the stock may even climb towards $20 or more.

I'll continue holding GIGM for the long term.

Looks great!
GigaMedia Q2: Record Operating Results
http://biz.yahoo.com/prnews/070814/hktu004.html?.v=61

Ray

GigaMedia beats by $0.02
Briefing.com - August 14, 2007 7:51 AM ET

Reports Q2 (Jun) earnings of $0.17 per share, $0.02 better than the Reuters Estimates consensus of $0.15; revenues rose 11.1% year/year to $40.1 mln vs the $38 mln consensus. ''Second-quarter was another record for GigaMedia, with outstanding performance in every business unit,'' stated Chief Executive Officer Arthur Wang. ''More important, we expect even stronger growth in the second half and excellent momentum into 2008.''

I can't believe reporters continue to mislead investors, look at this from Briefing.com:

Quoterevenues rose 11.1% year/year to $40.1 mln vs the $38 mln consensus.

It's not "year/year", it is from the 1st quarter, sequential growth! Growth from the year ago levels was 88%!

Anyway, revenues and EPS were above expectations (while the stock was pricing in "weak numbers"), so we should have a big rally today. The stock is trading sharply higher on the pre-market.

As for the future, the CEO said the following:

''Second-quarter was another record for GigaMedia, with outstanding performance in every business unit,'' stated Chief Executive Officer Arthur Wang. ''More important, we expect even stronger growth in the second half and excellent momentum into 2008.''

I'll write more analysis and the conference call highlights over the next update (or maybe still today), but I know I'll continue holding GIGM for the long term, the company has been beating my own expectations.

GIGM posted quarterly results this AM.  Pre-market volume is high.  Let's see how she does today.  I've seen strange things happen after earnings released though.  One time I saw BOOM bid way up on good earnings then sell off for a big loss on the day.  However, BOOM had already ran up pre-earnings. 

Here is GIGM earnings link on Yahoo! Finance

http://biz.yahoo.com/prnews/070814/hktu004.html?.v=61

I don't usually do this but yesterday I decided to hold through earnings because I think this company is worth more than $11 and because I had a good entry and some buffer built in already.  Hopefully I won't get punished. 

These headlines are confusing to the public!

TABLE-GigaMedia Q2 net income falls
Tue Aug 14, 2007 8:08AM EDT

Aug 14 (Reuters) -                      GIGAMEDIA LTD. (GIGM.O: Quote, Profile, Research)                        Latest   Yr-ago qtr
(in $)                           
EPS (diluted)             0.17        0.18
Net ( million)            10.1        11.2
Total operating revenue ( million)     40.1        21.3
Reuters Estimates: EPS $0.15, revenue $38 million. --The company said its year-ago results included a one-time
disposal gain of about $7.0 million.
(Reporting by Bhaswati Mukhopadhyay in Bangalore)

...and it's also written by reuters. ...this would make this strike 2