GV Films news,future prospects,analysis,Growth potential,Dubious management.
Scripscan:GV Films
Code:523277
Cmp:6rs
Target:2rs
Duration:9-12 months
[GV Films story/Promoters history/Penny priced stock/Shocking valuations/management selling/risky business model/results/Avoid and exit/Better film production and distribution companies available]
Story:-I am tired of suggesting exit in the counter.Let me summarize my reasons.
1)Every single quarter the promters lures the common people with fake promises and they exits.Its been such now that they have got only 2% odd stake in their own company.Would you buy such a company where the promoters exits before yourself?Also having higher stake means the higher the scrip goes the richer the promoters would be but they are well aware that its not gonna happen.So lets opt for the safest route and exit completly from the company.The promoters would always get the salary no matter it makes profits or losses.
2)Its engaged in the business of Production & Distribution of films.One of the riskiest business models.In simple logic if 2 hits are suceeded by a flop then still its gonna succumb to losses.
3)Now its demerging its entities.The equity shareholders of GV Films have recently approved the scheme of arrangement between the company, GV Studio City and GV New Media Technologies.Its only in 2007 that the sales increased and chow lets do demerger but demerging for?God knows,Dont say unlocking value.lolz.
4)It has got a equity cap of 350crs.For delivering an EPS of re 1 it needs to deliver 35crs profits.Absurd stufff looking at the present condition.
5)The name "GV" stands for Mr G. Venkateshwaran,who hanged himself 5 years ago.He hanged bacause maybe "he cudnt manage the business at all",he was a legend in his field, but?you make out folks,wht i mean to say.
6)Its gathering all rights of english and hindi films and incresing its library size.Whats gonna do?take fees of re 1 from people and show them the films?
7)The company has esentially three business divisions wherein risks are huge. Further their scale of investment,gestation period are lots.There are so many better bets from sunrising sectors then why to get headache because of it?
8)6rs may look cheap but buying nothing for a marketcap of 215crs is horrendously expensive.Grow up guys.
Regards,
ARUN
I can be reached at:-arunanalyst@rediffmail.com
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Monday, May 12, 2008
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