jmb- $2...rumour takeover!, page-10

kawartha, any other interesting things from the AGM you can share with those of us that couldn't attend?

Jumbuck has terrific revenue momentum, positive cash flow, nearly $4mil in the bank, mainly fixed costs, zero leverage - I think it's management's prerogative to at least have a look at possible acquisitions. There are freebie ROE points up for grabs here (not that they need it at the moment).

Consolidation in this industry will definitely be happening. There are just too many bit-players about and the money pie is starting to get large enough for the big guys to really take note. Disney has recently kicked started proceedings by acquiring Living Mobile. I wouldn't rule out JMB being acquired as it has a few characteristics that make it standout from other similar sized companies.
* It has a niche which it is the dominant player. Mobile community chatrooms - it's the company's biggest earner, not games. Would be appealing to any giant to add to their product range.
* Jumbuck is actually one of very few companies that have successfully dealt with multi-user applications for the mobile platform. It's great IP for any company to have and definitely one of the standout growth areas for mobile entertainment.
* It makes money. Will be EPS accreditive for most players in this sector if acquired.
* There's a push from game studios to setup satellites outside the US/UK to take advantage of comparatively cheaper labour and running costs (AUS examples: Pandemic, Irrational Games, THQ's acquisition of Blue Tongue, Midway's acquisition of Ratbag, etc).
* For its size, JMB has exceptional networks with major telecommunication companies worldwide. Will be attractive to predators that seek to fill geographical gaps and speed up product rollouts.
* Still chump change for big players.

I'm impartial to any major takeover activities because an organically growing Jumbuck is still where you'll see the biggest mid-long term returns. In its short history Jumbuck has continued to improve revenue quarter-by-quarter regardless of whether it's release season or not. If it is able to keep up only a proportion of the growth momentum displayed over the past couple of years, shareholders will be very well rewarded indeed.