Friday, April 08, 2005

Eidos going once, going twice...

Guardian and Financial Times informed us that Eidos is dropping the Elevation Partners offer and moving towards SCi. Like I said earlier, Elevation Partners is in the business of making money, not in the business of making video games. Let me tell you the secret of making money as an investment company. The secret is – buy cheap and sell expensive. Everything in between in just management decisions.

I guess that Elevation Partners just thought that the price was too high. If the price is high at the start, it takes lot of managerial talent to get the price even higher. Let’s face it. Eidos management has almost bankrupted the company by now, so obviously there wasn’t much trust to the management’s ability to show the money.

Therefore Eidos goes to SCi, which happens to be in the business of making video games. They have proven track record and they have plans to elevate once glorious British video game industry back to the highest pedestal where it belongs. Eh, not quite so, but you get the picture.

For the Eidos share price this is sad news. It is quite possible that there will not be competing offer and therefore price starts to fall. If Eidos price falls, then SCi price will fall too. Investors think that it is nonsense to pay such high prices from either of companies, because the case is already settled. Now it is just your stock against mine. This lock-up means that cycle goes both ways, positive and negative. Final result, now it doesn’t take increasing sums to buy Eidos. This is all the excitement we have left. We can wait and see, if someone is dropping hefty offer just before the deal is done.
Post a Comment