Quote:
Originally Posted by BoredSocial
1) What are their chances of surviving in a world largely dominated by google maps?
2) Because of 1) how much is their balance sheet worth?
3) Where can I find their balance sheet to find out how much they have in hard assets?
4) They aren't worth 1B they are worth 887M.. which is important because it changes how much the assets need to be worth.
5) Buying this feels a lot like buying a company that manufactures 8 tracks. I would feel very uncomfortable giving it anything remotely close to 7 times earnings when I can get lots of companies with actual futures for roughly the same.
EDIT: I found their balance sheet. They gain literally nothing from it. They actually have >1 Euro in debt/liabilities for every Euro in current assets they have. That's not good for a company whose revenue is absolutely crashing. Sometimes things are cheap because they're garbage and have no future. I strongly suspect that this stock is being priced for its chances of figuring out how to survive into the future as some kind of reasonable player in GPS. That's not a bet I'd be willing to take.
I obviously did very little research so far, but i will try
.
1) Apple cant use google maps, so they are forced to use Tomtom software. They also made deals with major car companies for built in sat nav. Some bigger ones are still waiting to be recognized as revenue in the future. Also they are not really inferior to google maps, they had alot of experience building a good navigation system together with the maps. From reading some reviews both seem to have different advantages.
http://www.techradar.com/reviews/car...1093909/review
2) I still suck at valuation, but have a look yourself:
http://corporate.tomtom.com/investor.cfm
They had a ****load of debt 4 years ago because they bought teleatlas for 2.5 billion. They are pretty much debt free now with over 160 mill of cash on their balance sheet and less debt then that remaining. So i believe they are now ready to also do a spinoff (correct me if my l ogic is wrong here).
3)
http://corporate.tomtom.com/investor.cfm
4) I believe they are worth more when they are combined with apple. Apple is kind of ***** up integrating their maps in the iphone as they lack the expertise here. But would have to find out more about this (no idea how tho). I believe the fault is not so much with tomtom for their errors but more for the people who had to integrate it (they are also recently fired from apple). Also Apple really has no other choices when it comes to buying, so its more a question of will apple actually buy a company who does that? Nokia did it, and google has it already.
its also 887 million euros. so 1.1 billion $ i guess.
5) Their prime business doesnt really focus on manufacturing the navigation things, they manufacture the software behind it. So for example garmin isnt really competing with tomtom here. I believe garmin even uses tomtom software, but i would have to look this up (discoverd this thing yesterday) I think almost 50% of their revenue is from software now, and they have much higher margins with that. That is also a business that is hard for competitors to just enter.
@thruth:
I think they are downsizing their PND (personal navigation device) business and are focussing on built in sat nav for cars, sport watches and licensing with companies like apple. Like i said they have some deals coming through with peugot and citroen in the future, so that will mean alot of cars that have built in sat nav i think (but would also need to do more research on this). Those are businesses that are growing with high margins, so if they would do a spinoff it could be interesting. Currently they only show their revenues, and 50% come from those businesses, but they dont show how much of cost of revenue is from their PND business.
(little note about their sportswatch business, so far they havent been very succesfull there (since launch at end of '11, but its a 1 billion $ market and they are working on it).
let me know what you guys think, posted it here to get some feedback.
I believe a dutch bank said the odds were 30%, and a take over bid could be more then 10 euro per share (currently at 4 euros), since tomtom paid so much for teleatlas 4 years back. And they improved on those maps with their own software now. I see rumors that it could even be more, but i have no idea how reliable these are. I also do not know how to calculate the odds here and how to make an estimate of value here. But since Apple doesnt seem to have much other alternatives and the maps are important to them it seems tomtom has a good negotiating position here. SO the question here is, can apple figure this out and make it work without buying tomtom?
BTW i forgot to mention, Apple wants to build their Ios into cars now, and combining this properly with tomtom maps seems even more important then?
adding one more thing (this is going to become unreadable lol) google bought a feedback start up that basicly would let people give feedback on the routes people choose with google maps. So lets say you had to turn left somewhere, but there wasnt a left turn then feedback would cause a quick correction. They bought that company for 1 billion. And it was pretty much a few year old start up.
Last edited by chipchip; 07-08-2013 at 09:59 AM.