WRIT Media Group (WRIT) Risk Analysis

3 Followers

Public companies are required to disclose risks that can affect the business and impact the stock. These disclosures are known as “Risk Factors”. Companies disclose these risks in their yearly (Form 10-K), quarterly earnings (Form 10-Q), or “foreign private issuer” reports (Form 20-F). Risk factors show the challenges a company faces. Investors can consider the worst-case scenarios before making an investment. TipRanks’ Risk Analysis categorizes risks based on proprietary classification algorithms and machine learning.

WRIT Media Group disclosed 14 risk factors in its most recent earnings report. WRIT Media Group reported the most risks in the “Ability to Sell” category.

Risk Overview Q4, 2017

Risk Distribution

36% Ability to Sell

36% Macro & Political

14% Finance & Corporate

14% Tech & Innovation

0% Legal & Regulatory

0% Production

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

This chart displays the stock's most recent risk distribution according to category. TipRanks has identified 6 major categories: Finance & corporate, legal & regulatory, macro & political, production, tech & innovation, and ability to sell.

Risk Change Over Time

S&P500 Average

Sector Average

Risks removed

Risks added

Risks changed

WRIT Media Group Risk Factors

New Risk (0)

Risk Changed (0)

Risk Removed (0)

No changes from previous report

The chart shows the number of risks a company has disclosed. You can compare this to the sector average or S&P 500 average.

The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.

Risk Highlights Q4, 2017

Main Risk Category

Ability to Sell

With 5 Risks

Ability to Sell

With 5 Risks

Number of Disclosed Risks

No changes from last report

S&P 500 Average: 31

No changes from last report

S&P 500 Average: 31

Recent Changes

0Risks added

0Risks removed

0Risks changed

Since Dec 2017

0Risks added

0Risks removed

0Risks changed

Since Dec 2017

Number of Risk Changed

No changes from last report

S&P 500 Average: 4

No changes from last report

S&P 500 Average: 4

See the risk highlights of WRIT Media Group in the last period.

Risk Word Cloud

The most common phrases about risk factors from the most recent report. Larger texts indicate more widely used phrases.

Risk Factors Full Breakdown - Total Risks 14

Ability to Sell

Total Risks: 5/14 (36%)Above Sector Average

Competition4 | 28.6%

Competition - Risk 1

7. We are at the risk of mobile telephone and internet competition which may develop and the effects of which we cannot predict.

The mobile phone application and internet market is new, rapidly evolving and intensely competitive. We believe that the principal competitive factors in maintaining a mobile telephone application and an internet business are selection, convenience of download and other features, price, speed and accessibility, customer service, quality of image and site content, and reliability and speed of fulfillment. Although we intend to be able to compete in this market, when new technology is further developed, many potential competitors have longer operating histories, more customers, greater brand recognition, and significantly greater financial, marketing and other resources. In addition, larger, well-established and well-financed entities may acquire, invest in, or form joint ventures as the Internet, and e-commerce in general, continue to become more widely accepted. In addition, we will face competition on any sale of merchandise that is tailored to an artist, video game publisher, or sponsor. Many of our existing competitors, in addition to a number of potential new competitors, have significantly greater financial, technical and marketing resources than we do.

Competition - Risk 2

2. The creation of content for the entertainment and gaming industries is highly competitive and we will be competing with companies with much greater resources than we have.

The business in which we engage is significantly competitive. Each of our primary business operations is subject to competition from companies which, in some instances, have greater development, production, and distribution and capital resources than us. We compete for relationships with a limited supply of facilities and talented creative personnel to produce our films. We will compete with major entertainment companies, such as Sony, Warner Brothers, Disney, AEG, Live Nation, Electronic Arts, Ubisoft, Zynga and others for content. We also anticipate that we will compete with a large number of United States-based and international distributors and sub-distributors of alternative content including divisions of Sony/MGM, Cinedigm Digital Cinema Corp., NCM Fathom, and Screenvision in the production of music-related and event content that may be expected to appeal to national and international audiences. Additionally, our video games will compete with thousands of other "Apps" which are available in the App stores of Apple, Samsung, Microsoft and other mobile stores. More generally, we anticipate we will compete with various other leisure-time activities, such as home videos, movie theaters, personal computers and other alternative sources of entertainment. The production and distribution of music-content and mobile Apps are significantly competitive businesses, as they compete with each other, in addition to other forms of entertainment and leisure activities. There will be a proliferation of free TV broadcasters, cable and emerging HD cable channels, and mobile streaming providers looking to acquire content, which may not include music-related content or video games. There is also active competition among all companies in the entertainment and related industries for services of software developers, producers, directors, musicians and other Artists, and for the acquisition of entertainment properties. The increased number of entertainment offerings in the United States and abroad has resulted in increased competition for audience attention and may have an effect on the Company's ability to acquire and produce product. Revenues for any entertainment products depend in part on general economic conditions, but the competitive situation of an entertainment product offering is still greatly affected by the quality of, and public response to, the entertainment product that the artist makes available to the marketplace. There is strong competition throughout the converging mobile device and television industries, from cable providers, handset and tablet manufactures, major motion picture studios, video game publishers, and other independent technology companies, as well as from new entertainment content and viewing opportunities that have not yet reached the market.

Competition - Risk 3

4. The competition for distribution channels may have an adverse effect on revenues.

In the distribution of motion pictures and video games, there is very active competition to obtain distribution channels such as theaters, television networks, and other distribution channels throughout the world. A number of major global conglomerates have acquired motion picture theaters, television networks, and content streaming services. Such acquisitions may have an adverse effect on our distribution endeavors and our ability to book certain distribution outlets which, due to their prestige, size and quality of facilities, are deemed to be especially desirable for content distribution.

Competition - Risk 4

5. The competition for securing premier placement of mobile apps may have an adverse effect on video gaming revenues.

In the distribution of mobile apps, including the Company's video games, there is very active competition to obtain premiere placement and advertising dollars from mobile manufacturers and service providers throughout the world. A number of major software publishers have acquired such relationships and opportunities with the major carriers and handset manufacturers. Such agreements may have an adverse effect on our sales, marketing and distribution endeavors, and our ability to obtain premier App store placement, due to the prestige, size and quality of the established companies' product lines.

Demand1 | 7.1%

Demand - Risk 1

3. Audience acceptance of our content will determine our success, and the prediction of such acceptance is inherently risky.

We believe that our live concert theatrical success will be dependent upon general public acceptance, marketing, advertising and the quality of the production. The Company's production will compete with numerous independent and foreign productions, in addition to productions produced and distributed by a number of major domestic companies, many of which are divisions of conglomerate corporations with assets and resources substantially greater than that of ours. Our management believes that in recent years with the current promotion of 3D and 4K movies and equipment, and with the rapid growth rate in available mobile apps, that there has been an increase in competition in virtually all facets of our business. The growth of mobile content, pay-per-view television, and home video streaming products may have an effect upon theater attendance and non-theatrical motion picture distribution. As we may distribute productions to all of these markets, it is not possible to determine how our business will be affected by the developments, and accordingly, the resultant impact on our financial statements. Moreover, audience acceptance can be affected by any number of things over which we cannot exercise control, such as a shift in leisure time activities or audience acceptance of a particular style of music or artist.

Macro & Political

Total Risks: 5/14 (36%)Above Sector Average

Capital Markets5 | 35.7%

Capital Markets - Risk 1

10. Holding, trading, or engaging in transactions in digital currency is highly speculative and uncertain in nature, which may have an adverse effect on revenues.

The market for digital currency is still new and uncertain, and investors trading in digital currency, or that have funds invested in digital currency, may lose their entire investment. Whether the market for one or more digital currencies will move up or down, or whether a particular digital currency will lose all or substantially all of its value, is unknown. Such consumer risk may have an adverse effect on our sales, marketing and distribution endeavors, and our ability to establish trading revenues.

Capital Markets - Risk 2

11. Markets for digital currency have varying degrees of liquidity.

Thin markets can amplify volatility and reduce the probability that there will be an active market for one to sell, buy, or trade digital currency or products derived from or ancillary to them. In addition to liquidity risks, values in any digital currency marketplace are volatile and can shift quickly. Participants in any digital currency market are warned that they should pay close attention to their position and holdings, and how they may be impacted by sudden and adverse shifts in trading and other market activities. Our failure to create liquidity or adapt to any technological developments effectively could adversely affect our business, operating results, and financial condition.

Capital Markets - Risk 3

12. The legal status of certain digital currencies may be uncertain.

The legality of holding or trading digital currencies is not always clear. Whether and how one or more digital currencies constitute property, or assets, or rights of any kind may also seem unclear. Participants are responsible for knowing and understanding how digital currencies will be addressed, regulated, and taxed under applicable law. Such legal risk may have an adverse effect on our sales, marketing and distribution endeavors, and our ability to establish trading revenues.

Capital Markets - Risk 4

13. Accepting digital currencies on deposit or with any third party in a custodial relationship has attendant security risks.

Loss or theft of digital currency can occur through a security breach, user error, or a technological failure at a virtual currency wallet or exchange. Risks include security breaches, risk of contractual breach, and risk of loss. Virtual currency can be spent by anyone in possession of the associated ownership credentials. Transactions in most currencies are not reversible, even if the result of fraud or unauthorized use. In the event that a payment is misdirected, an incorrect amount is transferred, or a transaction is not completed in a timely manner due to an error by a virtual currency wallet, exchange, or processor, in most currencies the transaction is not reversible, the error is not correctible, and the consumer has no recourse against the wallet, exchange, or processor. Our failure to create secure transaction processing, or adapt to new security features or developments, could adversely affect our business, operating results, and financial condition.

Capital Markets - Risk 5

14. Disclosure and financing risks associated with digital currency trading activities.

Wallets and exchange operators have no obligation to provide disclosures to consumers related to service fees or charges associated with virtual currency transactions, the volatility and unregulated nature of the virtual currency ecosystem, or any of the other risks associated with such transaction. Financing a purchase or sale of digital currencies on a peer-to-peer basis creates the risk of losing your provided financing. Similarly, when accepting financing to enter a trading agreement, you accept the risk of not being able to repay that financing (e.g., if the market price of the digital currency you purchased with the financing falls). The Company must know all of the terms of any contracts entered into and how their trading strategies and other market risk factors can affect its financing obligations. Our failure to create a transparent transaction processing systems, trading risk management systems, or adapt to new security features or developments, could adversely affect our business, operating results, and financial condition.

Finance & Corporate

Total Risks: 2/14 (14%)Below Sector Average

Share Price & Shareholder Rights1 | 7.1%

Share Price & Shareholder Rights - Risk 1

1. Our auditor has expressed substantial doubt regarding our ability to continue as a going concern.

We continue to incur losses in our operations. While we expect to generate revenues within the next fiscal year, there is no assurance that we will be successful.

Debt & Financing1 | 7.1%

Debt & Financing - Risk 1

6. We have limited financial resources and there are risks we may be unable to acquire financing when needed.

To achieve and maintain competitiveness, we may be required to raise substantial funds. Our forecast for the period for which our financial resources will be adequate to support our operations involves risks and uncertainties and actual results could fail as a result of a number of factors. We anticipate that we may need to raise additional capital to develop, promote and distribute our product and to acquire property rights of the artists or publishers. Such additional capital may be raised through public or private financing as well as borrowings and other sources. Public or private offerings may dilute the ownership interests of our stockholders. Additional funding may not be available under favorable terms, if at all. If adequate funds are not available, we may be required to limit our operations significantly or to obtain funds through entering into arrangements with collaborative partners or others that may require us to relinquish rights to certain products and services that we would not otherwise relinquish and thereby reduce revenues to the company.

Tech & Innovation

Total Risks: 2/14 (14%)Below Sector Average

Cyber Security1 | 7.1%

Cyber Security - Risk 1

9. The distribution of entertainment content and related materials is at a high risk for piracy which may affect our earnings.

The entertainment content distribution industry, including us, may continue to lose an indeterminate amount of revenue as a result of piracy due to unauthorized copying of our product at post production houses, copies of prints in circulation to theaters, unauthorized videotaping at theaters and other illegal means of acquiring our copyrighted material.

Technology1 | 7.1%

Technology - Risk 1

8. We are at risk of technological changes to which we may be unable to adapt as swiftly as our competition.

We believe that our future success will be partially affected by continued growth in the use of digital, 3D, and ultra-HD (4K) broadcasting. The production, acquisition and distribution of music-related content to movie theaters and by home video retailers, free TV broadcasters, cable, 3D and ultra-HD cable channels, and mobile streaming providers are still relatively new, and predicting the extent of further growth, if any, is difficult. The market for this content is characterized by rapid technological developments, evolving industry standards and customer demands, and frequent new product introductions and enhancements. Our failure to adapt to any technological developments effectively could adversely affect our business, operating results, and financial condition.

See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.

FAQ

What are “Risk Factors”?

Risk factors are any situations or occurrences that could make investing in a company risky.

The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment.

They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result.

It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.

How do companies disclose their risk factors?

Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process.

Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”.

Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report.

According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.

How can I use TipRanks risk factors in my stock research?

Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing.

You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector.

Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements.

A simplified analysis of risk factors is unique to TipRanks.

What are all the risk factor categories?

TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below.

1. Financial & Corporate

Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results.
Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing.
Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments.
Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances.

2. Legal & Regulatory

Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company.
Regulation – risks related to compliance, GDPR, and new legislation.
Environmental / Social – risks related to environmental regulation and to data privacy.
Taxation & Government Incentives – risks related to taxation and changes in government incentives.

3. Production

Costs – risks related to costs of production including commodity prices, future contracts, inventory.
Supply Chain – risks related to the company’s suppliers.
Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls.
Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation.

4. Technology & Innovation

Innovation / R&D – risks related to innovation and new product development.
Technology – risks related to the company’s reliance on technology.
Cyber Security – risks related to securing the company’s digital assets and from cyber attacks.
Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying.

5. Ability to Sell

Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers.
Competition – risks related to the company’s competition including substitutes.
Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration.
Brand & Reputation – risks related to the company’s brand and reputation.

6. Macro & Political

Economy & Political Environment – risks related to changes in economic and political conditions.
Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19.
International Operations – risks related to the global nature of the company.
Capital Markets – risks related to exchange rates and trade, cryptocurrency.

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