Perfect World Co., Ltd. (PWRD)

dinasourneil (99.95) Submitted: 10/05/07 1:12 PM : Start Price: $29.08 PWRD Score: -4.09

I'm sorry but this valuation is simply madness. We've got a market cap of $1.63 billion, which is larger than established domestic developer, take two interactive (BioShock, Grand Theft Auto, over $1 billion in 2006 sales). Total sales in 2006 for PWRD were... drumroll please... $13 Million... that's with an m, as in 3 less zeroes than it's market cap. Oh and they're in China, so there's always the risk of a government crackdown on these MMORPGS that PWRD produces, not to mention fierce competition from other domestic developers and licensed versions of popular American MMORPGS such as World of Warcraft and Guild Wars, yet, instead of wanting to be compensated for this risk.. investors are currently coughing up over 100 times sales for the stock. Without a doubt this valuation is not sustainable long term.

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