Brean Murray Initiates Coverage on Shanda Games (GAME) with a Hold
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Brean Murray initiates coverage on Shanda Games (Nasdaq: GAME) with a Hold rating.
Brean analyst says, "Since Shanda Games represents well over 90% of Shanda Interactive, our thesis mirrors our view of Shanda Interactive (Nasdaq: SNDA). We are concerned about the high reliance on aging content, and although the company has several games in the pipeline, the success of new launches is unproven given the recent checkered track record of high profile launches. At the same time, given a pretty weak start of trading, likely solid near-term results from the heating up of old games, and an already fairly depressed multiple of 11x our FY10 pro forma EPS estimate, further downside appears limited. Further, since Shanda has control of the asset and SDG is channeling about 21% of its gross revenue back to Shanda, we view GAME as essentially “B shares” on the same underlying asset, which should trade at a lower multiple vs. the “A shares.”"
To see more analyst ratings on GAME Click Here.
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