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Dreamworks

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DreamWorks

1. Difference in the numbers of the company your buying
According to their income statements in 2009, DreamWorks revenue over the years has remained constant and around about $700 million a year while NVIDIA is about $3.4 million a year and the gross profit is $291 million and $1.2 million respectively. DreamWorks since 2006 has been pretty consistent in the profit and revenue they made over the years as well as NVIDIA since 2007. According to the balance sheet, DreamWorks has no debt compared to the $24 million NVIDIA has. DreamWorks assets are $1.3 million a year and NVIDIA’s is about $3.5 million while the liabilities are $242 million and $920 million respectively in 2009.

2. Why are these differences here?
If you compare DreamWorks and NVIDIA you would think that it would not be a great purchase but to me it would be. NVIDIA has been in the red the last few years because of the new 3D Vision technology. It is not cheap to develop considering it is such a new type of technology so they don’t have the ability to have a positive cash flow. They have been trying to perfect it and be the best that it can be. I feel that once it becomes better known within the next 6 months to a year that NVIDIA will start to profit once again. Especially once DreamWorks begins to promote the software and technology, NVIDIA will begin to flourish. Even though NVIDIA had higher revenue over the years compared to DreamWorks, they needed to make more money to compensate for the higher operating costs. This is also why there new products cost so much more since they are new to the market.

3. Why does it make sense to buy them?
DreamWorks Pictures develops, produces, and distributes films, video games and television programming. Originally its films were distributed worldwide by Paramount, but the animation studio remained independent of Paramount/Viacom. DreamWorks Animation teamed up with Pacific Data Images in 1996, emerging as the main competitor to Pixar in the age of computer-generated animation and creating some of the highest grossing animated hits of all time. DreamWorks Animation announced it would release all of its films, beginning with Monsters vs. Aliens (2009), in stereoscopic 3D.
With all of this in mind, the best company that DreamWorks should buy would be NVIDIA technologies. They specialize in the development of graphics processing units and chipset technologies including graphic cards, and video game console chips. More recently, they have just started with the stereoscopic 3D technology for computers with NVIDIA 3D Vision. A combination of high-tech wireless glasses and advanced software, 3D Vision automatically transforms hundreds of PC games into full stereoscopic 3D as well as movies and photos. With this merger it will allow DreamWorks to be ahead of the game against its competitors with having a company that has developed 3D computers and works exclusively with Samsung 3D which does the 3D TVs. Having such a partnership and available technology will not only grow DreamWorks as a company but it will help make NVIDIA more known.

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