tehrik-e-insaaf
Member
I've been searching for this article I read over 10 years ago for quite some time and finally tonight I thought I'd spend time to find it - I finally found it - I knew it existed!
We all know that NCL and Creatures each supposedly own 32% of TPCi (The Pokemon Company International) while Game Freak owned 33% - but what became of the fourth shareholder? After all 32, 32 and 33 only add up to 97% right?
Turns out it's been under our noses the entire time.
The fourth shareholder of the Pokemon Company... *drumroll*
4Kids Entertainment (responsible for convincing NCL to bring it to America when NoA failed to convince NCL)... (http://online.wsj.com/article/SB934753154504300864.html)
I found this article that I read a long time ago (but for some reason it got lost)...
4Kids Entertainment Signs New Five-Year Agreement With Pokemon USA/Leading Children's Entertainment Company Acquires 3% Interest In The Pokemon Company.
http://www.thefreelibrary.com/4Kids...ive-Year+Agreement+With+Pokemon...-a079018670
Now being the enterprising chap that I am, I did a lot of digging into the current state of 4 Kids. After lots of ridiculous debts and lots of failed ventures the company re-emerges, WITH ALL ITS EQUITY INTACT, TODAY, as 4Licensing Corporation under the Pink Sheet FOUR
Naturally, knowing the value of Pokemon I went over to buy some of this penny-level stock... Then I thought to myself... "Nintendo probably had a clever put-call option of some kind the way they did with Rare incase 4Kids stopped performing" and decided to go back and dig into tons of old SEC filings until I found the home run (the re-emerged company still has no filings, no traded volume, etc)
http://yahoo.brand.edgar-online.com...panyid=2289&ppu=%2fdefault.aspx%3fcik%3d58592
So looks like 4Kids sold out of their share in TPCi for a measly $960k in 2005 (based on 10K)... Probably not what they wanted but I'm sure when Nintendo and Creatures agreed to dilute themselves, they could get rid of 4Kids anytime they wanted... Looks like they did... So it's safe to say that TPCi is now either equally split among the three shareholders (at 1/3rd each) or if repurchasing the stock led to a gross up then Game freak technically owns almost 34% while Creatures and Nintendo are sitting at 33% (again roughly since gross-ups don't exactly just add a single percentage back like that)
Or maybe 4Kids really believed that the TPCi entity was only worth ~30 million dollars (given Game Freak itself collects revenues for developing the game and Creatures collects an individual licensing fee while Nintendo collects game licensing and for a while, publishing profits as well)? This was also the dark period of late 2005 when Nintendo's own stock had fallen and the EV of the company was <$5 billion - the games were still selling well but all the merchandise was all gone... I guess we will never know what would have had happened or the exact arrangement between the parties...
Sadly I went back and looked through 4Kids earlier filings, but since the equity method was not used (and the investment was done using the cost method... WTF? Didn't these guys ever hear of SarbOx? No wonder the company crashed and burned) - I have no clear numbers to determine valuation of the Pokemon Company over time other than Nintendo's incredibly vague Japanese accounting-based documents that we have today (with wonky fair-value rules that really don't tell us much)...
Anyways, thought you guys might find that interesting... Looks like I still can't retire since 4 Licensing doesn't own any part of TPCi =/ So much for my dreams of buying the ultimate penny stock =/
Will keep digging and update this if I learn more...
We all know that NCL and Creatures each supposedly own 32% of TPCi (The Pokemon Company International) while Game Freak owned 33% - but what became of the fourth shareholder? After all 32, 32 and 33 only add up to 97% right?
Turns out it's been under our noses the entire time.
The fourth shareholder of the Pokemon Company... *drumroll*
4Kids Entertainment (responsible for convincing NCL to bring it to America when NoA failed to convince NCL)... (http://online.wsj.com/article/SB934753154504300864.html)
I found this article that I read a long time ago (but for some reason it got lost)...
4Kids Entertainment Signs New Five-Year Agreement With Pokemon USA/Leading Children's Entertainment Company Acquires 3% Interest In The Pokemon Company.
http://www.thefreelibrary.com/4Kids...ive-Year+Agreement+With+Pokemon...-a079018670
Now being the enterprising chap that I am, I did a lot of digging into the current state of 4 Kids. After lots of ridiculous debts and lots of failed ventures the company re-emerges, WITH ALL ITS EQUITY INTACT, TODAY, as 4Licensing Corporation under the Pink Sheet FOUR
Naturally, knowing the value of Pokemon I went over to buy some of this penny-level stock... Then I thought to myself... "Nintendo probably had a clever put-call option of some kind the way they did with Rare incase 4Kids stopped performing" and decided to go back and dig into tons of old SEC filings until I found the home run (the re-emerged company still has no filings, no traded volume, etc)
http://yahoo.brand.edgar-online.com...panyid=2289&ppu=%2fdefault.aspx%3fcik%3d58592
Investment in Equity Securities – In September 2001, the Company purchased a 3% equity interest in the Pokémon Company, a closely held Japanese company, which was organized in 1998 by Nintendo Co. Ltd, Creatures, Inc. and Game Freak, Inc. (the “Investment Group”, to manage and control all rights to “Pokémon” throughout the world. The Company accounted for this investment on a cost basis. In October 2005, the Company sold its interest in equal shares to the members of the Investment Group for aggregate proceeds of $960, resulting in a gain of $234 as reflected on the accompanying consolidated statements of income.
So looks like 4Kids sold out of their share in TPCi for a measly $960k in 2005 (based on 10K)... Probably not what they wanted but I'm sure when Nintendo and Creatures agreed to dilute themselves, they could get rid of 4Kids anytime they wanted... Looks like they did... So it's safe to say that TPCi is now either equally split among the three shareholders (at 1/3rd each) or if repurchasing the stock led to a gross up then Game freak technically owns almost 34% while Creatures and Nintendo are sitting at 33% (again roughly since gross-ups don't exactly just add a single percentage back like that)
Or maybe 4Kids really believed that the TPCi entity was only worth ~30 million dollars (given Game Freak itself collects revenues for developing the game and Creatures collects an individual licensing fee while Nintendo collects game licensing and for a while, publishing profits as well)? This was also the dark period of late 2005 when Nintendo's own stock had fallen and the EV of the company was <$5 billion - the games were still selling well but all the merchandise was all gone... I guess we will never know what would have had happened or the exact arrangement between the parties...
Sadly I went back and looked through 4Kids earlier filings, but since the equity method was not used (and the investment was done using the cost method... WTF? Didn't these guys ever hear of SarbOx? No wonder the company crashed and burned) - I have no clear numbers to determine valuation of the Pokemon Company over time other than Nintendo's incredibly vague Japanese accounting-based documents that we have today (with wonky fair-value rules that really don't tell us much)...
Anyways, thought you guys might find that interesting... Looks like I still can't retire since 4 Licensing doesn't own any part of TPCi =/ So much for my dreams of buying the ultimate penny stock =/
Will keep digging and update this if I learn more...