Remember how happy we all were when Enad Global 7 bought Daybreak and how upbeat and happy Robin Floodin was about the future of the company?  The irony of this is that I suspect we will soon look back on the Columbus Nova years… I mean Daybreak years… of being a privately held company as a time of stability.

Enad Global 7

I mean yes, Jason Epstein, Ji Ham, and the executive crew there were at best uncommunicative and at worst bald face liars, incapable of investing in any new development, content to live off the milk that the herd of games they bought from SOE could provide.  But now that Daybreak is part of a publicly held company, things look like they could get much worse.

Of course Jason Epstein and Ji Ham engineered that and turned the whole thing into a reverse merger, so I won’t be praising them.  This is all a situation of their making.  I will merely be irked at the fact that, like Bobby Kotick, they will profit greatly from the misery of their staff and customers.

What am I even on about here?  Let me go back a bit.

Last May a capital management group Alta Fox made a series of demands of the EG7 board of directors.  Alta Fox wanted dividends and stock buy backs, and they wanted EG7 relisted on the NASDAQ exchange in the US.  The former would be immediate money in their pocket while the latter would make it much easier to scam restail investors… I mean would make the stock more accessible to a wide range of investor likely leading to a higher price.

And the board at EG7 acceded to those demands.

They announced a very aggressive dividend and stock buyback plan, dedicated a minimum of all profits towards that.  That is now money that will not be available to develop new products… which, I guess was kind of a faint hope given the history of the board leadership and their run at Daybreak… but will be earmarked to enrich shareholders.

That isn’t necessarily the worst thing.  The stock market existed for decades on dividends as its primary driver and reward for investors.  It is only in times where companies promise infinitely increasing share prices that we are headed towards a truly epic economic fuck up. (Avert your eyes from all those companies doing stock buy backs in a vain attempt to keep up that sort of promise.  I am sure it will work out well this time!)

And EG7 has shown signs that it has been working on a move to NASDAQ… though, technically they are already part of the NASDAQ, they are just traded under the First North Growth North NASDAQ umbrella, which limits the company’s reach, so really they want to be in a more central part of the exchange, and probably one that does valuations in US dollars… by making changes in the organization to support such an effort.  (NASDAQ runs what one might consider the second tier stock exchange in the US, behind the New York Stock Exchage, but is where a lot of US tech companies go public because the requirements are less stringent.  It is where VCs take their investments to cash out.)

So investors like Alta Fox should be happy, right?  Right?!

No, never.  Well, it doesn’t help that EG7’s stock price has been down of late.  I guess they haven’t laid off enough people yet.

But the third thing that Alta Fox was demanding was a top to bottom review of the company with selling the company as one of the possible outcomes.

Well, over at GamesIndustry.biz there is a report that a major shareholder is demanding the sale of EG7.

The story doesn’t identify which shareholder, which seems like journalist malpractice… I mean serioulsy, WTF… but I don’t think we have to think tooooo hard to take a stab at which capital management firm might be making such a demand.  To paraphrase the Deep Throat, “Follow the winging.”

Why now?

On Tuesday EG7 will be holding its quarterly earning call to cover Q4 2023 and 2023 overall.

This is clearly an attempt to put some public pressure on the company.  If they answer questions as part of the call, and they generally do, the question of selling the company will now be at the top of the list.  An evasive answer will be given to this question, a prepared one, but the board will be on notice and a bunch of news stories will feature the possible sale of the company in headlines, which will further reinforce the idea that it will happen.

Meanwhile, the major shareholder will be publicly on again about how the EG7 stock is undervalued, down 80% from its all time high… a high that happened during the Covid bubble and which was so clearly unsustainable that even I was wondering aloud how gaming companies were going to deal with the post-pandemic reality when things went back to “normal” and revenue fell… and how it is the cheapest video game stock around.

That will serve to boost the share price for them for a bit.  Even a hint of blood in the water will bring the sharks.  But eventually the company will have to actively explore selling to a competitor or put forth a plan to please shareholders that does not involve a sale.

Not selling means more dividends and more stock buy backs and getting on a better stage in the NASDAQ domain.  But they are already doing that and can only do so much more.  The only real recourse is to abandon all they new game development plans they spoke about last year and dump the cash at the feet of the investors.  But even that probably won’t be enough.

Which leaves selling… which itself is a bleak prospect.  There are two questions there, who would buy EG7 and what would happen next?

The who is grim.

I mean, you’d love Microsoft or EA or Sony or somebody, if not big at least healthy, would buy them.  But what do those companies need with EG7’s little camp of misfit toys?

No, if you go back to a post I did about who could have bought CCP back in 2018 besides Pearl Abyss, you will see a range of second tier brand exploiters whose plan is always to buy themselves into revenue growth (on Wall Street, every asset is assumed to be worth exactly what you paid for it, so any revenue you get is an increase) by purchasing companies and cutting them down to the minimum viable staff possible to keep them going.

There are a couple of players possible I suppose… Tencent maybe… and we should probably all be happy that Embracer’s management has screwed the pooch so badly that they won’t be acquiring and destroying any more companies in the near future.  But companies like Gamigo still lurk out there.

The upside of Gamigo is that the titles would survive for a while.  It might do well to heed the annual question over at Massively OP about which is the most vulnerable title at Daybreak.  Somebody like Gamigo buys EG7, then H1Z1 is closed pretty much right away and we start betting on which of the lowest performing titles is next on the block.  (I would bet on DDO, if only because there is overhead going to pay Hasbro for the use of the license.)

So, just to sum this up in a cheery way, the paths forward seem to be:

• EG7 abandons any pretense of new titles and just shovels profit into dividends and stock buy backs in an attempt to sate the cavernous maw of capitalism.
• EG7 is sold to a competitor that maybe keeps most of the title active, but staff is cut and a maitenance mode existence is likely the happiest outcome.

Anyway, we shall see how pessimistic I am really being come Tuesday.  Who knows, maybe EG7 made bank in Q4 and the stock price will go up and the situation will be saved for the moment, allowing us to retain the oft abused hope that we’ll see another EverQuest title.

It could happen, right?  Right?

Remember how happy we all were when Enad Global 7 bought Daybreak and how upbeat and happy Robin Floodin was about the future of the company?  The irony of this is that I suspect we will soon look back on the Columbus Nova years… I mean Daybreak years… of being a privately held company as a time of stability.

Enad Global 7

I mean yes, Jason Epstein, Ji Ham, and the executive crew there were at best uncommunicative and at worst bald face liars, incapable of investing in any new development, content to live off the milk that the herd of games they bought from SOE could provide.  But now that Daybreak is part of a publicly held company, things look like they could get much worse.

Of course Jason Epstein and Ji Ham engineered that and turned the whole thing into a reverse merger, so I won’t be praising them.  This is all a situation of their making.  I will merely be irked at the fact that, like Bobby Kotick, they will profit greatly from the misery of their staff and customers.

What am I even on about here?  Let me go back a bit.

Last May a capital management group Alta Fox made a series of demands of the EG7 board of directors.  Alta Fox wanted dividends and stock buy backs, and they wanted EG7 relisted on the NASDAQ exchange in the US.  The former would be immediate money in their pocket while the latter would make it much easier to scam restail investors… I mean would make the stock more accessible to a wide range of investor likely leading to a higher price.

And the board at EG7 acceded to those demands.

They announced a very aggressive dividend and stock buyback plan, dedicated a minimum of all profits towards that.  That is now money that will not be available to develop new products… which, I guess was kind of a faint hope given the history of the board leadership and their run at Daybreak… but will be earmarked to enrich shareholders.

That isn’t necessarily the worst thing.  The stock market existed for decades on dividends as its primary driver and reward for investors.  It is only in times where companies promise infinitely increasing share prices that we are headed towards a truly epic economic fuck up. (Avert your eyes from all those companies doing stock buy backs in a vain attempt to keep up that sort of promise.  I am sure it will work out well this time!)

And EG7 has shown signs that it has been working on a move to NASDAQ… though, technically they are already part of the NASDAQ, they are just traded under the First North Growth North NASDAQ umbrella, which limits the company’s reach, so really they want to be in a more central part of the exchange, and probably one that does valuations in US dollars… by making changes in the organization to support such an effort.  (NASDAQ runs what one might consider the second tier stock exchange in the US, behind the New York Stock Exchage, but is where a lot of US tech companies go public because the requirements are less stringent.  It is where VCs take their investments to cash out.)

So investors like Alta Fox should be happy, right?  Right?!

No, never.  Well, it doesn’t help that EG7’s stock price has been down of late.  I guess they haven’t laid off enough people yet.

But the third thing that Alta Fox was demanding was a top to bottom review of the company with selling the company as one of the possible outcomes.

Well, over at GamesIndustry.biz there is a report that a major shareholder is demanding the sale of EG7.

The story doesn’t identify which shareholder, which seems like journalist malpractice… I mean serioulsy, WTF… but I don’t think we have to think tooooo hard to take a stab at which capital management firm might be making such a demand.  To paraphrase the Deep Throat, “Follow the winging.”

Why now?

On Tuesday EG7 will be holding its quarterly earning call to cover Q4 2023 and 2023 overall.

This is clearly an attempt to put some public pressure on the company.  If they answer questions as part of the call, and they generally do, the question of selling the company will now be at the top of the list.  An evasive answer will be given to this question, a prepared one, but the board will be on notice and a bunch of news stories will feature the possible sale of the company in headlines, which will further reinforce the idea that it will happen.

Meanwhile, the major shareholder will be publicly on again about how the EG7 stock is undervalued, down 80% from its all time high… a high that happened during the Covid bubble and which was so clearly unsustainable that even I was wondering aloud how gaming companies were going to deal with the post-pandemic reality when things went back to “normal” and revenue fell… and how it is the cheapest video game stock around.

That will serve to boost the share price for them for a bit.  Even a hint of blood in the water will bring the sharks.  But eventually the company will have to actively explore selling to a competitor or put forth a plan to please shareholders that does not involve a sale.

Not selling means more dividends and more stock buy backs and getting on a better stage in the NASDAQ domain.  But they are already doing that and can only do so much more.  The only real recourse is to abandon all they new game development plans they spoke about last year and dump the cash at the feet of the investors.  But even that probably won’t be enough.

Which leaves selling… which itself is a bleak prospect.  There are two questions there, who would buy EG7 and what would happen next?

The who is grim.

I mean, you’d love Microsoft or EA or Sony or somebody, if not big at least healthy, would buy them.  But what do those companies need with EG7’s little camp of misfit toys?

No, if you go back to a post I did about who could have bought CCP back in 2018 besides Pearl Abyss, you will see a range of second tier brand exploiters whose plan is always to buy themselves into revenue growth (on Wall Street, every asset is assumed to be worth exactly what you paid for it, so any revenue you get is an increase) by purchasing companies and cutting them down to the minimum viable staff possible to keep them going.

There are a couple of players possible I suppose… Tencent maybe… and we should probably all be happy that Embracer’s management has screwed the pooch so badly that they won’t be acquiring and destroying any more companies in the near future.  But companies like Gamigo still lurk out there.

The upside of Gamigo is that the titles would survive for a while.  It might do well to heed the annual question over at Massively OP about which is the most vulnerable title at Daybreak.  Somebody like Gamigo buys EG7, then H1Z1 is closed pretty much right away and we start betting on which of the lowest performing titles is next on the block.  (I would bet on DDO, if only because there is overhead going to pay Hasbro for the use of the license.)

So, just to sum this up in a cheery way, the paths forward seem to be:

• EG7 abandons any pretense of new titles and just shovels profit into dividends and stock buy backs in an attempt to sate the cavernous maw of capitalism.
• EG7 is sold to a competitor that maybe keeps most of the title active, but staff is cut and a maitenance mode existence is likely the happiest outcome.

Anyway, we shall see how pessimistic I am really being come Tuesday.  Who knows, maybe EG7 made bank in Q4 and the stock price will go up and the situation will be saved for the moment, allowing us to retain the oft abused hope that we’ll see another EverQuest title.

It could happen, right?  Right?

Remember how happy we all were when Enad Global 7 bought Daybreak and how upbeat and happy Robin Floodin was about the future of the company?  The irony of this is that I suspect we will soon look back on the Columbus Nova years… I mean Daybreak years… of being a privately held company as a time of stability.

Enad Global 7

I mean yes, Jason Epstein, Ji Ham, and the executive crew there were at best uncommunicative and at worst bald face liars, incapable of investing in any new development, content to live off the milk that the herd of games they bought from SOE could provide.  But now that Daybreak is part of a publicly held company, things look like they could get much worse.

Of course Jason Epstein and Ji Ham engineered that and turned the whole thing into a reverse merger, so I won’t be praising them.  This is all a situation of their making.  I will merely be irked at the fact that, like Bobby Kotick, they will profit greatly from the misery of their staff and customers.

What am I even on about here?  Let me go back a bit.

Last May a capital management group Alta Fox made a series of demands of the EG7 board of directors.  Alta Fox wanted dividends and stock buy backs, and they wanted EG7 relisted on the NASDAQ exchange in the US.  The former would be immediate money in their pocket while the latter would make it much easier to scam restail investors… I mean would make the stock more accessible to a wide range of investor likely leading to a higher price.

And the board at EG7 acceded to those demands.

They announced a very aggressive dividend and stock buyback plan, dedicated a minimum of all profits towards that.  That is now money that will not be available to develop new products… which, I guess was kind of a faint hope given the history of the board leadership and their run at Daybreak… but will be earmarked to enrich shareholders.

That isn’t necessarily the worst thing.  The stock market existed for decades on dividends as its primary driver and reward for investors.  It is only in times where companies promise infinitely increasing share prices that we are headed towards a truly epic economic fuck up. (Avert your eyes from all those companies doing stock buy backs in a vain attempt to keep up that sort of promise.  I am sure it will work out well this time!)

And EG7 has shown signs that it has been working on a move to NASDAQ… though, technically they are already part of the NASDAQ, they are just traded under the First North Growth North NASDAQ umbrella, which limits the company’s reach, so really they want to be in a more central part of the exchange, and probably one that does valuations in US dollars… by making changes in the organization to support such an effort.  (NASDAQ runs what one might consider the second tier stock exchange in the US, behind the New York Stock Exchage, but is where a lot of US tech companies go public because the requirements are less stringent.  It is where VCs take their investments to cash out.)

So investors like Alta Fox should be happy, right?  Right?!

No, never.  Well, it doesn’t help that EG7’s stock price has been down of late.  I guess they haven’t laid off enough people yet.

But the third thing that Alta Fox was demanding was a top to bottom review of the company with selling the company as one of the possible outcomes.

Well, over at GamesIndustry.biz there is a report that a major shareholder is demanding the sale of EG7.

The story doesn’t identify which shareholder, which seems like journalist malpractice… I mean serioulsy, WTF… but I don’t think we have to think tooooo hard to take a stab at which capital management firm might be making such a demand.  To paraphrase the Deep Throat, “Follow the winging.”

Why now?

On Tuesday EG7 will be holding its quarterly earning call to cover Q4 2023 and 2023 overall.

This is clearly an attempt to put some public pressure on the company.  If they answer questions as part of the call, and they generally do, the question of selling the company will now be at the top of the list.  An evasive answer will be given to this question, a prepared one, but the board will be on notice and a bunch of news stories will feature the possible sale of the company in headlines, which will further reinforce the idea that it will happen.

Meanwhile, the major shareholder will be publicly on again about how the EG7 stock is undervalued, down 80% from its all time high… a high that happened during the Covid bubble and which was so clearly unsustainable that even I was wondering aloud how gaming companies were going to deal with the post-pandemic reality when things went back to “normal” and revenue fell… and how it is the cheapest video game stock around.

That will serve to boost the share price for them for a bit.  Even a hint of blood in the water will bring the sharks.  But eventually the company will have to actively explore selling to a competitor or put forth a plan to please shareholders that does not involve a sale.

Not selling means more dividends and more stock buy backs and getting on a better stage in the NASDAQ domain.  But they are already doing that and can only do so much more.  The only real recourse is to abandon all they new game development plans they spoke about last year and dump the cash at the feet of the investors.  But even that probably won’t be enough.

Which leaves selling… which itself is a bleak prospect.  There are two questions there, who would buy EG7 and what would happen next?

The who is grim.

I mean, you’d love Microsoft or EA or Sony or somebody, if not big at least healthy, would buy them.  But what do those companies need with EG7’s little camp of misfit toys?

No, if you go back to a post I did about who could have bought CCP back in 2018 besides Pearl Abyss, you will see a range of second tier brand exploiters whose plan is always to buy themselves into revenue growth (on Wall Street, every asset is assumed to be worth exactly what you paid for it, so any revenue you get is an increase) by purchasing companies and cutting them down to the minimum viable staff possible to keep them going.

There are a couple of players possible I suppose… Tencent maybe… and we should probably all be happy that Embracer’s management has screwed the pooch so badly that they won’t be acquiring and destroying any more companies in the near future.  But companies like Gamigo still lurk out there.

The upside of Gamigo is that the titles would survive for a while.  It might do well to heed the annual question over at Massively OP about which is the most vulnerable title at Daybreak.  Somebody like Gamigo buys EG7, then H1Z1 is closed pretty much right away and we start betting on which of the lowest performing titles is next on the block.  (I would bet on DDO, if only because there is overhead going to pay Hasbro for the use of the license.)

So, just to sum this up in a cheery way, the paths forward seem to be:

• EG7 abandons any pretense of new titles and just shovels profit into dividends and stock buy backs in an attempt to sate the cavernous maw of capitalism.
• EG7 is sold to a competitor that maybe keeps most of the title active, but staff is cut and a maitenance mode existence is likely the happiest outcome.

Anyway, we shall see how pessimistic I am really being come Tuesday.  Who knows, maybe EG7 made bank in Q4 and the stock price will go up and the situation will be saved for the moment, allowing us to retain the oft abused hope that we’ll see another EverQuest title.

It could happen, right?  Right?