$2.04 $0.18 (0.0%)

03:18 PM EDT on 05/24/19

RealNetworks, Inc. (NASDAQ:RNWK)

CAPS Rating: No stars

The Company is a creator of digital media services and software.

Current Price $2.04 Mkt Cap $70.6M
Open $1.86 P/E Ratio 0.00
Prev. Close $2.04 Div. (Yield) $0.00 (0.0%)
Daily Range $1.86 - $2.04 Volume 7,547
52-Wk Range $1.86 - $3.41 Avg. Daily Vol. 1

Caps

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All Players

170 Outperform
46 Underperform
 

All-Star Players

31 Outperform
17 Underperform
 

Wall Street

8 Outperform
3 Underperform
 

Top NASDAQ:RNWK Bull/Bear Pitches

The best Bull and Bear pitches based on recency and number of recommendations.

muirmm (29.68)
Submitted August 12, 2014

RealNetworks is rated with a single star here on CAPS (in August, 2014). It’s been given up for dead. And, as you can see, my start price is $7.80. What do you get for $7.80 when you buy RNWK? The most recent quarterly report says the company has… More

kristm (99.78)
Submitted December 09, 2009

Hello, this is the Y2K dot-com collapse calling for RealNetworks. Yes, doing well thank you. Oh the kids are great. I just called to let you know we forgot about you in 2000 and still have some business that needs to be addressed. Well, it seems your… More

NASDAQ:RNWK VS S&P 500 (SPY)

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Recent Community Commentary

Read the most recent pitches from players about RNWK.

Recs

1
Member Avatar muirmm (29.68) Submitted: 8/12/2014 3:32:24 AM : Outperform Start Price: $7.80 NASDAQ:RNWK Score: -119.71

RealNetworks is rated with a single star here on CAPS (in August, 2014). It’s been given up for dead. And, as you can see, my start price is $7.80. What do you get for $7.80 when you buy RNWK? The most recent quarterly report says the company has $195,000,000 net cash in the bank, or $5.40 per share. Also, if you delve into the 10-Q for the second quarter of 2014 (ended June 30), you will find a discussion of the 45% share of Rhapsody that RealNetworks owns. It’s reported on RNWK’s books with a “carrying value” of $10 million. But what is the real value of 45% of Rhapsody? Rhapsody is a music streaming company. It isn’t public, so it doesn’t have a stock price to tell us its value. But, one of its competitors, Pandora, is public; it had Q2 revenues of $219 million and a market cap of $5.4 billion. Rhapsody had Q2 revenue of $42 million, or 19% as much as Pandora. If we figure that it should have a similar ratio of revenue to market cap, it should have 19% of Pandora’s market cap, or just over a billion dollars. RealNetworks owns 45%, so its share of Rhapsody is worth about $450,000,000. Divide this by the share count of 36 million, and you get $12.50 per share. Add in the $5.40 in cash per share, and you can see that RNWK has a LIQUIDATION VALUE of almost $18.00 per share. That’s right, if you bought the shares today at $7.80, and the company were just broken up and sold for parts tomorrow, you would be paid an extra $10.00 per share, a gain of 128% over your purchase price. This is quite extraordinary. I have never seen anything like this sort discount to liquidation value, ever.

But it gets better! Last year, RNWK launched a service called RealPlayer Cloud, which lets users upload and share videos. You might think that YouTube already has this niche covered, but RealPlayer Cloud seems to offer enough advantages of privacy, convenience and quality to attract a following. It grew from 2 million users in Q1 to 5 million users in Q2 this year. That’s a pretty spectacular 150% quarterly growth rate. Say the growth rate slows to 120% in Q3, then 100% in Q4, then 80%, then 60%, then 40%, then 30%, then 20%, then levels off at 10% per quarter for a couple of years. RealPlayer Cloud would grow to 200 million users in less than three years. That’s about the same size as Dropbox, a somewhat similar service with a similar pricing model. Dropbox is similar enough to RealPlayer Cloud (though not a direct competitor) that we might expect it to have a comparable value. And what is the value of Dropbox? It doesn’t trade on the open market. But, private investment firms trade chunks of its equity at prices that value the whole company at over $9 billion. If RealPlayer Cloud matches the value of Dropbox, RNWK will be worth $250 per share in about three years. Now, this is only speculation. Maybe there’s only a 10% chance of that happening. But still, a 10% chance of making $250 ought to mean that RealPlayer Cloud is worth $25 per RNWK share. Or, maybe, give it a steep time-value-discount and say it’s worth $15 per share, right now. Add that to the cash and the Rhapsody holding, and I think it’s reasonable to value RNWK at $33 a share today, or FOUR TIMES its current price. And I left out a bunch of other valuable businesses that RNWK owns, which might eventually add a few more dollars of value per share.

Are you worrying that there must be a catch? Maybe the management is not stockholder friendly? Note that the founder and current CEO, Rob Glaser, owns 35% of the company, so he isn’t likely to do anything to screw up the stock’s value. For example, recent dilution has been less than 3% a year, which seems tolerable. My only complaint would be that the company is doing too many different things. I would prefer a tighter focus. But, hey, there's almost no risk when you buy a company for less than half its liquidation value.

Disclosure: needless to say, I have bought a huge quantity of RNWK. Huge! Even borrowed thousands of dollars to do it. So if you do find a flaw in my reasoning, please let me know so I can sell some of the shares before getting into trouble.

Recs

0
Member Avatar KimLanners (< 20) Submitted: 5/4/2011 7:10:42 AM : Outperform Start Price: $9.58 NASDAQ:RNWK Score: -187.31

internet media service and software!

Recs

9
Member Avatar kristm (99.78) Submitted: 12/9/2009 10:50:16 AM : Underperform Start Price: $10.85 NASDAQ:RNWK Score: +238.96

Hello, this is the Y2K dot-com collapse calling for RealNetworks. Yes, doing well thank you. Oh the kids are great. I just called to let you know we forgot about you in 2000 and still have some business that needs to be addressed. Well, it seems your business plan is invalid and your technology isn't sustainable. We need to enter you into bankruptcy procedures immediately. Yes, we understand that you're about to launch the Next Great Thing but we've been letting you side for about nine years now and my boss isn't very happy... He says you either bring out something popular now or we'll begin liquidation by the end of the year. Hello? Hello?

Leaderboard

Find the members with the highest scoring picks in RNWK.

Score Leader

rsimplicio

rsimplicio (97.27) Score: +329.42

The Score Leader is the player with the highest score across all their picks in RNWK.

Top
Pick
Member Name Member
Rating
Start
Date
Call Time
Frame
Start
Price
Stock
Gain
Index
Gain
Score Commentary
rsimplicio 97.27 3/20/2009 Underperform 3M $6.06 -66.34% +263.08% +329.42 0 Comment
bmswbc 91.14 11/25/2008 Underperform 1Y $9.31 -78.08% +239.34% +317.42 0 Comment
wrobbie < 20 2/10/2009 Underperform 1Y $8.47 -75.91% +233.81% +309.72 0 Comment
wfrblue 71.47 10/17/2008 12/21/2008 Underperform 3M $10.77 -81.05% +215.66% +296.71 0 Comment
StrategyFreak < 20 5/26/2009 Underperform 5Y $6.82 -70.08% +223.71% +293.79 0 Comment
XJ 98.66 7/14/2009 7/15/2014 Underperform 5Y $7.01 -70.89% +213.98% +284.86 0 Comment
crunchyoyster 96.27 6/8/2009 Underperform 5Y $7.49 -72.78% +204.74% +277.52 0 Comment
kristm 99.78 12/9/2009 Underperform 3Y $10.85 -81.20% +157.76% +238.96 1 Comment
TMFMoby 99.71 3/4/2010 Underperform 5Y $13.07 -84.39% +151.69% +236.07 0 Comment
gumbee181 27.05 9/30/2010 Underperform 1Y $8.98 -77.29% +145.49% +222.77 0 Comment

Wall Street

See what the Wall Street professionals think, according to their public statements and filings.

Player Name Player
Rating
Start
Date
Call Time
Frame
Start
Price
Stock
Gain
S&P
Gain
Score End Date Commentary
TrackBWS 96.14 1/9/2018 Outperform NS $3.38 -39.64% +3.14% -42.79 0 Comment
trackbrigantine 86.76 2/13/2012 Outperform NS $11.05 -81.54% +109.80% -191.34 0 Comment
trackbrigantine 86.76 12/17/2010 Outperform NS $10.52 -23.80% +0.38% -24.17 11/4/2011 @ $8.02 0 Comment
TrackJPMorgan 84.63 9/12/2009 Underperform NS $13.84 +15.90% +3.97% -11.92 12/9/2009 @ $16.04 0 Comment
TrackDoughertyCo < 20 2/13/2009 Outperform NS $7.76 -73.73% +243.47% -317.19 0 Comment
TrackPiperJaff 85.88 10/8/2008 Underperform NS $10.15 -79.89% +198.25% +278.14 0 Comment
TrackBearStearns < 20 1/3/2008 Outperform NS $16.37 -41.90% -4.72% -37.18 4/17/2012 @ $9.51 0 Comment
TrackScottBleier < 20 12/14/2007 Outperform 3M $16.72 -57.12% -5.90% -51.21 11/9/2012 @ $7.17 0 Comment
TrackMorganKeeg 75.12 9/12/2007 Outperform NS $17.04 -88.03% +102.27% -190.31 0 Comment
TrackPacificGrow < 20 8/31/2007 Outperform NS $25.04 +2.72% -15.05% +17.76 8/1/2008 @ $25.72 0 Comment
TrackMichaelBrus 80.96 8/8/2007 Outperform 1Y $16.67 -87.76% +99.79% -187.55 0 Comment
TrackMatrix < 20 3/26/2007 Outperform NS $22.05 -56.87% -3.78% -53.09 4/17/2012 @ $9.51 0 Comment
TrackJimCramer 85.98 3/9/2007 Underperform 3W $20.83 -90.21% +113.37% +203.58 0 Comment
TrackDADavidson 86.92 3/1/2007 Outperform NS $22.10 -90.77% +113.58% -204.35 0 Comment
TrackOppenheimer 50.12 2/15/2007 Underperform NS $26.11 -92.19% +106.21% +198.40 0 Comment
TrackSoleil 93.56 2/15/2007 Underperform NS $38.60 -26.01% -0.25% +25.76 8/1/2007 @ $28.56 0 Comment
TrackMaximGroup 63.35 2/15/2007 Outperform NS $26.11 -92.19% +106.21% -198.40 0 Comment
TrackJefferies 78.35 11/30/2006 Underperform NS $44.84 -28.28% +0.23% +28.51 2/28/2007 @ $32.16 0 Comment
TrackCanaccord 66.57 11/8/2006 Outperform NS $31.25 -93.47% +118.06% -211.54 0 Comment
TrackJMP 83.90 11/8/2006 Underperform NS $46.20 -27.01% +9.36% +36.37 5/4/2007 @ $33.72 0 Comment
TrackKaufmanBros 93.24 11/8/2006 Outperform NS $46.20 -45.89% -8.49% -37.40 8/1/2008 @ $25.00 0 Comment
TrackJimCramer 85.98 10/16/2006 Outperform 3W $45.96 -32.99% +2.86% -35.85 3/10/2007 @ $30.80 0 Comment
TrackStifel 90.62 9/5/2006 Underperform NS $41.20 -13.11% +10.64% +23.74 2/20/2007 @ $35.80 0 Comment

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