Thanks Powertrade, it has been a good week so far.
World of Warcraft accounts for over 99% of The9's (NCTY) current revenues so it is pretty much a pure play on WoW. But as I'm sure you're aware it's highly risky to have all your eggs in one basket and I believe in the past the market has highly discounted The9 for being a one trick pony despite the huge growth that WoW is showing.
In the past year though The9 has done a very good job of acquiring a lot of high quality games for the future. Aside from WoW they now also have the licenses to Guild Wars, Hellgate: London, and FIFA Online. In addition they also have a number of games which I have limited knowledge of but have been popular in other Asian markets, like South Korea, such as the sequels to Ragnarok and Audition.
But the biggest news and what you see in that last gap up on Monday is that Electronic Arts (ERTS) is taking a 15% stake in The9. This means all future EA games should go through The9. I believe this is a huge vote of confidence from EA and to have the backing of the largest video game company world is a very bullish sign to me. Like you I had also thought that Vivendi was too large of a company to buy just for WoW so NCTY has been my favorite pick for a while.
Although I must point out that this is still a risky and very volitle stock. Right now almost all of their revenue does only come from one game and like every Chinese company they are completely at the whim of the government which could try to shut down all the internet cafes if they wanted.
However I don't think that is very likely to happen. I also believe their lineup is the best of all the Chinese game companies and should only add to their bottom line in the future. Additionally Burning Crusade is still not released yet and will provide yet another catalyst for NCTY in the future.
Good luck Powertrade and anybody else still reading, please don't sue me if you lose money acting on my advice.
As of this posting I am long chares of The9 Limited (NCTY)
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World of Warcraft accounts for over 99% of The9's (NCTY) current revenues so it is pretty much a pure play on WoW. But as I'm sure you're aware it's highly risky to have all your eggs in one basket and I believe in the past the market has highly discounted The9 for being a one trick pony despite the huge growth that WoW is showing.
In the past year though The9 has done a very good job of acquiring a lot of high quality games for the future. Aside from WoW they now also have the licenses to Guild Wars, Hellgate: London, and FIFA Online. In addition they also have a number of games which I have limited knowledge of but have been popular in other Asian markets, like South Korea, such as the sequels to Ragnarok and Audition.
But the biggest news and what you see in that last gap up on Monday is that Electronic Arts (ERTS) is taking a 15% stake in The9. This means all future EA games should go through The9. I believe this is a huge vote of confidence from EA and to have the backing of the largest video game company world is a very bullish sign to me. Like you I had also thought that Vivendi was too large of a company to buy just for WoW so NCTY has been my favorite pick for a while.
Although I must point out that this is still a risky and very volitle stock. Right now almost all of their revenue does only come from one game and like every Chinese company they are completely at the whim of the government which could try to shut down all the internet cafes if they wanted.
However I don't think that is very likely to happen. I also believe their lineup is the best of all the Chinese game companies and should only add to their bottom line in the future. Additionally Burning Crusade is still not released yet and will provide yet another catalyst for NCTY in the future.
Good luck Powertrade and anybody else still reading, please don't sue me if you lose money acting on my advice.
As of this posting I am long chares of The9 Limited (NCTY)