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Varchild2008 (84.02)

Shanda Games (GAME) is a Buy not a Hold Ms. Brean Carret



September 28, 2009 – Comments (1)

Given Market price of just 15 cents off the bottom....

Assuming Scottrade's fundamentals are accurate in that there is ZERO debt on the books of Shanda games and about 29 cents per share in CASH position....

Given Shanda Interactive made 1 Billion in the IPO and is essentially running this IPO because Shanda Games is by no means a stand-a-lone traditional IPO.  This is SNDA #2.

Given SNDA's track record of powerful earnings growth.

Given SNDA's management's aggressiveness in acquiring other developers and pushing out new titles every year or so.

Given that the P/E multiple should be on par with (ATVI)......

There's just no reason for me to say this is a HOLD and agree with Brean Murray Carter.

Premarket just like the aftermarket has shown a pricing surge.  That's fine to a point.  I would not buy GAMES at $13.00  a share.... I'd try to get in below that and then when October China Games Conf. arrives I would hold.

But to say to investors to just HOLD at this point in time?  No.  This ain't no typical IPO that plunges into the bottom of the sea for many months.  This one has some life to it.

So Varchild gives his own investment (GAME) a BUY  until the China Conf.  and then either HOLD or SELL depending on where the share price is in relation to my $13.00 price target.

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