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Electronic Arts Inc. (ERTS) Message Board

  • ihitthebid ihitthebid Jun 14, 2006 8:31 AM Flag

    Backdated Stock Options

    Does anyone know if management at EA backdated stock options?

    Has anyone heard management's position on this?

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    • >>Given the above, you could easily predict that the stock would correct. In a time of uncertainty, the price moves down to the 50 month simple moving average (at a minimum). Check a 20 year chart.<<

      Forgot one last comment:
      The events that I highlighted are a huge factor in the uncertainty that you refer to above. Therefore, again, take those events out = reduce uncertainty = less pain for the stock.

      Good luck all!!

    • Appreciate the reply.

      >>And, yes, I posted this on this board long before it actually happened. So, don't try to tell me you can't predict a correction. We didn't need a melt down of the market, or a hurricane to create a loss of value in a single troubled stock.<<

      I agree that the stock was going to correct. I was simply stating that the correction would not have caused the stock to fall past 48-52 if those other "unpredictable" but significant events that I mentioned had not happened.

      Best of luck to you too.

    • It isn't nearly as complicated as you make it sound.

      Everyone knew that a hardware transition was underway. Most people in the industry (because they have a self-interest in saying so) initially insisted that this transition would be smooth. They were wrong about this. As I've said many, many times, Sony's failure to be first to market left open the possibility that they would not win the battle this time. That means EA faces greater possibility of failure in predicting where the development resources should be applied. That created uncertainty for Wall Street. The market hates uncertainty.

      Given the above, you could easily predict that the stock would correct. In a time of uncertainty, the price moves down to the 50 month simple moving average (at a minimum). Check a 20 year chart.

      And, yes, I posted this on this board long before it actually happened. So, don't try to tell me you can't predict a correction. We didn't need a melt down of the market, or a hurricane to create a loss of value in a single troubled stock.

      Now we'll try to pick the bottom, or something reasonably close without riding it down more than 10%. I don't believe in buying blindly in fear of missing a 15% move. That too easily results in dead money. I can earn 5% virtually risk free while I wait.

      Best of luck.

    • >>>LOL!! Yeah it is the broader markets fault. Nevemind the fact that EA has basically been warning, missing and trying to prop up their numbers since the December qtr of 2004. Its all the markets fault!!! <<<
      --------------------------------------------
      Actually,
      Your right, it's not "the markets fault", but think about (truthfully consider) where all the game makers would be if:
      1) PS3 was released on time.

      2) The RECORD 2005 hurricane season, capped by Katrina & Rita, never hit. A lot of gaming bears refer to the negative effect that high gas/oil prices (gas for car, rising costs to ship AND make goods and materials, etc.) has on discretionary spending. Hmmm.., Lets see.., why are gas/oil prices so high (historically speaking, IN THE U.S.)?? Well, the hurricane season alone added approximately .40/gal due to disruptions which caused a supply/demand imbalance (on the SUPPLY side). Another .40 (give or take) can be attributed to world unrest (Iran alone is half this problem), and .05-.10 was supply/demand imbalance (on the DEMAND side). Note that SUPPLY is improving as capacity comes online and demand has begun to abate.

      I know, I know, anyone with half a brain should have been able to predict these things!! Then you could come to the obvious conclusion that ERTS would tumble excessively. Well, those of you in this elite group need to go into business and charge for your astute insight. With those kinds of predicting skills you'll make millions!!!�

      Imagine if you put another 3-4 million consoles (PS3) on the market over the past 6 months AND took away the crazy (but possibly more frequent due to global destruction) hurricane season. Realistically (IMHO), you come to the conclusion that ERTS, along with the rest of the game makers, were brought down that extra 15-20% by hardware delivery problems and MOTHER NATURE. Therefore, you're right; it wasn't just "the markets fault"

      Realistically, without the aforementioned uncontrollable (AND unpredictable, unless you're "the amazing Kreskin") events, ERTS WOULD NOT have dropped below 48-50/share because earnings would have been SIGNIFICANTLY better.

      Quick note on earnings: If your EA, does it make more sense to show more earnings and NOT protected your marquee sports titles OR to step up to the plate with the checkbook, protect your turf, stifle the competition and position yourself for the future?? I choose the later. Before they signed the exclusive sports deals they were loosing market share to games that were being offered at $20 in order to gain market share at the expense of profits.

      Yes, just like any company, they could have done better in some areas but (In My Humble Opinion) they have made some good moves including their acquisitions and purchasing of competitors stock. Even if the Spielberg partnership doesn't work out they will be fine but what if it works out even better than anyone expects?? What happens when some of the smaller, less capitalized companies can't keep up with the rising costs and look for help? It sure helps to have all that cash....

      Start or add to positions in the 37-43 range while you can. Since you can never call the bottom (not even the chartists) you can't wait for it to get to 37-39 to make your 1st buy because it may never get there and you'll miss out on the first 15-20% move when it pops. The person who wants to wait to see some good signs first will doubt the 1st move to 44-45. Then when it jumps again to 49-51 they'll finally get in but, again, they will have missed that first 15-20%. AVERAGE into a position now (over the next few weeks) then sleep well for the next 9-18 months and you'll wake up with a 50% or more gainer.

      Patience pays!!
      Good luck all!!

      P.S. Kevlarbreak's Msg (69234) has a lot of good pts as well (whether or not he is/isn't in the video game industry).

    • "Whatever you complain about at EA and whatever isn't done excellenty at EA is done much worse at all other publishers."

      I absolutely agree with you. Holy shit is this industry run by knuckleheads. EA will remain dominent because ATVI and TTWO strive for mediocracy - and fail.

    • I was saying that being an "industry veteran" you would remember that the OTHER EA execs approved the purchase of Maxis to port stuff to the PC, just in case the PC took off as the dominent platform, and the "dollhouse project" (Sims) was nearly scrapped several times because EA just didn't get it. MAXIS's success was a $1B fluke; which may fortunately cancel out two other big decisions: ea dot com and JAMDAT.



      ---------------------------------------------
      "An excerpt from an actual memo from Don Mattrick in 1998, debating the value of purchasing Maxis:

      "Let's face it, the industry has passed Will Wright by."

      You were saying...? "

      -----------------------------------------------

    • eventually, yes, and you can imagine why...

    • >>>LOL!! Yeah it is the broader markets fault. Nevemind the fact that EA has basically been warning, missing and trying to prop up their numbers since the December qtr of 2004. Its all the markets fault!!! <<<

      Actually,
      Your right, it's not "the markets fault", but think about (truthfully consider) where all the game makers would be if:
      1) PS3 was released on time.

      2) The RECORD 2005 hurricane season, capped by Katrina & Rita, never hit. A lot of gaming bears refer to the negative effect that high gas/oil prices (gas for car, rising costs to ship AND make goods and materials, etc.) has on discretionary spending. Hmmm.., Lets see.., why are gas/oil prices so high (historically speaking, IN THE U.S.)?? Well, the hurricane season alone added approximately .40/gal due to disruptions which caused a supply/demand imbalance (on the SUPPLY side). Another .40 (give or take) can be attributed to world unrest (Iran alone is half this problem), and .05-.10 was supply/demand imbalance (on the DEMAND side). Note that SUPPLY is improving as capacity comes online and demand has begun to abate.

      I know, I know, anyone with half a brain should have been able to predict these things!! Then you could come to the obvious conclusion that ERTS would tumble excessively. Well, those of you in this elite group need to go into business and charge for your astute insight. With those kinds of predicting skills you'll make millions��

      Imagine if you put another 3-4 million consoles (PS3) on the market over the past 6 months AND took away the crazy (but possibly more frequent due to global destruction) hurricane season. Realistically (IMHO), you come to the conclusion that ERTS, along with the rest of the game makers, were brought down that extra 15-20% by hardware delivery problems and MOTHER NATURE. Therefore, you're right; it wasn't just "the markets fault"

      Realistically, but for the aforementioned uncontrollable (AND unpredictable, unless you're "the amazing Kreskin") events, ERTS wouldn't have dropped below 48-50/share.

      Quick note on earnings: If your EA, does it make more sense to show more earnings and NOT protected your marquee sports titles OR to step up to the plate with the checkbook, protect your turf, stifle the competition and position yourself for the future?? I choose the later. Before they signed the exclusive sports deals they were loosing market share to games that were being offered at $20 in order to gain market share at the expense of profits.

      Yes, just like any company, they could have done better in some areas but (In My Humble Opinion) they have made some good moves including their acquisitions and purchasing of competitors stock. Even if the Spielberg partnership doesn't work out they will be fine but what if it works out even better than anyone expects?? What happens when some of the smaller, less capitalized companies can't keep up with the rising costs and look for help? It sure helps to have all that cash��

      Start or add to positions in the 37-43 range while you can. Since you can never call the bottom (not even the chartists) you can't wait for it to get to 37-39 to make your 1st buy because it may never get there and you'll miss out on the first 15-20% move when it pops. The person who wants to wait to see some good signs first will doubt the 1st move to 44-45. Then when it jumps again to 49-51 they'll finally get in but, again, they will have missed that first 15-20%. AVERAGE into a position now (over the next few weeks) then sleep well for the next 9-18 months and you'll wake up with a 50% or more gainer.

      Patience pays!!
      Good luck all!!

      P.S. Kevlarbreak's Msg (69234) has a lot of good pts as well (whether or not he is/isn't in the video game industry).

    • "I promise that Austin and myself aren't the only people from inside the industry who have no doubt in EA's long term success. Actually it's the other way around: You'll have a hard time to find someone inside the industry who does NOT believe in EA. I don't know anyone of my colleagues who does not speak about EA without great respect for their success, their analytical market approach and their therefrom resulting market power."

      LOL!!! Austin's wang meet Kevlarbreaks hand Kevlarbreak's hand meet Austin's wang.

      I guess Riticello and others since just did not see what the other "industry insiders" saw that was so clear. Sure great company etc... a behemoth in the industry but clearing has been fumbling and stumbling along. When do these industry insiders ever consider a close look at the valuation of a security. Yeah EA is big and powerful. Does that mean it deserves a valuation way out of wack with the market and the sector?

    • >>Take a look at all the old execs who recently jumped ship.<<

      An excerpt from an actual memo from Don Mattrick in 1998, debating the value of purchasing Maxis:

      "Let's face it, the industry has passed Will Wright by."

      You were saying...?

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