If you original stocks in dow and hold on to them？ how much return you will get? Most people will say more than 1000% and it is the proof of buy and hold strategy. Really? I checked 30 companies in dow 30 in 1928. Most companies are gone. Some remaining companies like GM, Chryser, U.S. Steel and etc. had experienced at least one bankruptcy. There is only one company still in dow that is GE. So if you spent $100 each on original 30 companies, you probably did not break even by now. No company can live forever.
MSG is trading @all time high around 33.45. I will take some chips off the table when it goes to 34. I still believe the market is underestimating the impact of Lin.
Tuesday, February 21, 2012
Monday, February 13, 2012
Jeremy Lin's impact on MSG part 2
If you listened to my blog last Thursday, congratulation! you are up 7% already. After I did a more careful analysis, I believe the impact on MSG bottom line from Lin will be 30 million this year
1. the increased average price for ticket. The price increse is about 26% already. Which translate to 800,000 to one million dollar per game. For the remailing of the season, it will be about 20 million.
2. Merchandise sales. Total earning impacts will be at least 5 million. Assume MSG get net $1-3 for every t-shirt or other stuff sold.
3. Increased ticket sale. Assume 2000 more tickets sold every game @the average price of 180, that's another 7 million
4. TV rights to Asia countries. That's at least 3 million dollar.
5. Advertisement on the Madison Square Garden, minimum increase by 2 million.
6. Deeper into the playoff, easily 3 million.
Some intangibles. Put pressure on Time Warner to reach cable deal.
For next season, the impact on earning will be double minus his salary, assuming 15 million. Jeremy is 23, if he can do this until he is 30. The total financial impact will be at least 350 million on MSG bottom line. The total share outstanding is 77 million, so the stock should increase by 5 dollars from his impact. I increased my target to $35.
1. the increased average price for ticket. The price increse is about 26% already. Which translate to 800,000 to one million dollar per game. For the remailing of the season, it will be about 20 million.
2. Merchandise sales. Total earning impacts will be at least 5 million. Assume MSG get net $1-3 for every t-shirt or other stuff sold.
3. Increased ticket sale. Assume 2000 more tickets sold every game @the average price of 180, that's another 7 million
4. TV rights to Asia countries. That's at least 3 million dollar.
5. Advertisement on the Madison Square Garden, minimum increase by 2 million.
6. Deeper into the playoff, easily 3 million.
Some intangibles. Put pressure on Time Warner to reach cable deal.
For next season, the impact on earning will be double minus his salary, assuming 15 million. Jeremy is 23, if he can do this until he is 30. The total financial impact will be at least 350 million on MSG bottom line. The total share outstanding is 77 million, so the stock should increase by 5 dollars from his impact. I increased my target to $35.
Thursday, February 9, 2012
Jeremy Lin's impact on MSG
If you have not heard about Jeremy Lin, then this is not for you. Lin's impact on MSG stock should be significant. It will bring 2 to 3 thousand more fans each game to Madison Square Garden, which is about $100,000 additional revenue per game. The TV rights to Taiwan and China will generate $5 million per season at least. The advertisements will increase by 1-2 million (given Yao Ming's Houston Rocket experience). You are looking at least 10 million dollar net revenue. 90% of this revenue will translate into net income It is 10% of current NI of MSG. My guess the impact will be much more than 10 million a year. MSG should go up at least 10% to $33 because of Lin
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