This sale happened now because the dollar started to rebound, look for more Europe/Middle East/Asian companies to start to buy up US companies before the dollar strengthens more. No company would step in and buy as long as the dollar was going down, now with the dollar starting to rise they are going to jump into the M&A activity with both feet. I called this several weeks ago.
2) the ATvi buyout puts 3 times the vaule on ATVI then its market cap. Think about that It's maket cap was 6.4b at the close of Friday. The deal vaules the buyout at 18.9b. What does this mean for ERTS<THQI<TTWO. Can you say undervauled? MSFT may buy up ERTS, or ERTS may buy TTWO. Or MSFT may buy TTWO. But someone is going to buy someone else. Consoliodation for the industry is loong over do with the price of game design sky rocketing, the small firms can not compete and will be bought. Bungie could go public in an IPO and if MSFT buys a video game company the combined company of Bungie and TTWO or EATS would make a great company.
3)M&A is back look at C and ATVI deals. This should give the market in general another reason to continue the rally.
4) Major companies think the dollar is done going down and are buying at the bottom. Watch the ECB decsion on Thurs if they lower rates or hint at lowering rates the dollar will spike and the market will rally.
5) GME is a ripe buyout canidate. They are stealing share from WMT,TGT,BBY. therefore any of these companies could buy GME to stop the loss of share and to add to its non growing bottom line.
6) I look for gamefly to possibly IPO this year. This will be a direct competitor to GME and should be a big warning sign for GME holders to take profits. An IPO of gamefly will let the company increase its reach into the used game business and also rental business. That being said I see no reason why GME could not buy gamefly outright like it did with ELBO. If this happens look for GME to be itself boughtup since it will have a monoploy on the retail rental and used game business. ( this is just brainstorming and should be treated as such)
7) Atvi will get more than WOW from Blizzard, the deal is a win win for both companies and could push ATVI shares to $30.00 near term.
As far as shorting stocks I actually don't do that either. I prefer the other side of the trades. I so use puts though. With a stock that I think is spring loaded to the up side vs. the downside (but still in a volatile mkt like we have now) I often use strangles. I actually got burned on my last GME $55x60 strangle though (of course, the wk after expiration it "would have" been money)...
I didn't play the strangle around this last earnings report but probably will on the next one if it's still in the $50's because I think it will have based out for long enough to support a push into the mid $60's. However, by having the strangle I should be able to benefit from an unexpected decline since I'll own puts as well. Some people don't like these but I like them better than straddles because they actually cost less than a straddle so you don't need as much price movement. :-)
Thanks for the insight and the link. I guess I should have assumed that the MM have everything automated.
Buying DEC 60 puts seems like a solid trade. I also believe that GME will have a pull back before the holidays. At this point, I'm looking for a pull back before I buy GME. Then on the holiday rally, I'll sell my calls. Sounds good to me. We'll see if my plan works out.
Basically the Market Markers, Institutions etc set their computers to buy and or sell when certain levels are met. They could be levels in the particular stock or levels in the dow or the price of oil or whatever. In other words the particular stock's fundamentals have little if anything to do with it. So Joe Investor frequently gets caught in a downdraft without warning which may have nothing to do with the particular stock.
NO, I do not play short, its too risky. The closest I come is to infrequently buy puts. As a matter of fact on Friday I took a BIG chance and bought some Dec 60 puts on GME. At the moment I am slightly behind. But I am still looking for a SHORT TERM pullback then a run up based on Holiday sales.
Here is how the professional option players make a killing on the backs of the retail investors who get carried away by emotions.
This morning Dec 25 Calls were sold for $3.80. now you can buy them back for 85 CENTS.
"the ATvi buyout puts 3 times the vaule on ATVI then its market cap. Think about that It's maket cap was 6.4b at the close of Friday. The deal vaules the buyout at 18.9b."
--> They're valuing the "combined" company in the 18B area "not" ATVI by itself. I believe the deal values ATVI in the 8B area (still a nice premium of around 25% but not 3x).
yes I wasn't clear on that in my post. It comes out that Vevendi vaule of 8b and ATVi at 6.4b the combined company would be at 18b so you have a 4b premium in the new company. But the bottomline is still the same this means that the other game publishers THQI<ERTS<TTWO are undervauled. It's a game changer anyway you look at it.
I'm thinking about trading ERTS, THQI and/or TTWO off the news. ATVI will be wild at the open. And not sure if it will continue to ramp up or fall back down. ERTS, THQI, and/or TTWO should all benifit from the news and should not be as volitile as ATVI. Looking at the DEC 55.00 calls for ERTS tommorrow. Also looking at DE the spilt takes effect on Tues so DE should see a nice runup before split.
This is just a stategy for Vivedi to penetrate the console market. They see the growth & potential in this market. I dont know who would want to buy GME but it is a solid take over target if other retailers believe there is considerable opportunity in this market...GME would give them most of the market share instantly.
yes the ERTS deal last month probably gave both ATVI and Vevendi a push to get the deal done. Yes GME IMO is a takeover target due to the fact that games will make more than movies this year. With the strike ongoing companies like DIS, CBS, NBC will need some growth and will more than likely shop around for companies like ERTS, TTWO etc but if the big media companies start buying inot the VG field than the big retailers are sure to follow. this is the "hot retailing sector" and most retailers need something to pad their bottom line. If not a poutright buyout then a big stake in the company. The M&A we are about to have in this market will be company to company the private money is on the siodelines and big companies like GE, honeywell, Ussteel, WMT, TGT have great balance sheets and huge amounts of stock to buy smaller growth companies. This also plays into the delince in companies EPS over the last year. Buybacks of stock are good but they do nothing to increase revs. GME gives a retailer global reach for only about 12b
Its called "sorry should known last week". There is no money to be made SHORT TERM. Now as a good LONG TERM buy, that could be a different story. In that case you might want to buy LATE Monday or Tuesday but I wouldn't chase it.