Sunday, July 20, 2008

Webzen

Webzen (WZEN)
Webzen is a developer of MMORPG games primarily for the PC. Their claim to fame is a Diablo II ripoff called MU, but this thing brings in cash from around the world. They have a promising pipeline of games with Huxley in beta testing right now. Since I included the best stock in my portfolio, Chesapeake Energy, I figured I would include the worst, Webzen.

Competitive Advantage
Pipeline of games, current/future deals with The9, growing MMORPG market
Valuation
Korean based company, lower wages for employees

Main Competitors
Shanda Interactive (SNDA)
NETEASE.COM (NTES)
Electronic Arts Inc (ERTS)

Weaknesses
Management - Nothing good has come out of management thus far. Missed game release dates, inability to capitalize on game hype
Saturation/competition of the MMORPG market

Financials (Yahoo!)
The Key Statistics on Yahoo! are incorrect. Do not use them for analysis. I haven't calculated out everything recently, but I can tell you that they are not as bad as Yahoo! shows. Yahoo! did not take into account a 3/10 split that occurred a while back. I also don't know how often those stats are updated, if at all because it is an ADR.

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