Now my plan will be for it to drop and hope it hits in the high 15's to 16s so I can back up the truck because they have an epic lineup for 2012! I have to average in and even though I am a buy on the stock and owns shares, I wanted this miss so I could average in. My story was made money took profits and bought back in with half the investment around the 23's and planned on riding it out. Unfortuantely, it dropped more than anticipated but this is what I was hoping for and glad I didnt average in before the earnings! You will see a bottom after this...their lineup is too strong moving forward and with the chance of games going digital, it makes EA another strong play in another type of market!
Sorry I said miss, they beat earnings but lowered guidance. Surprised they did that but they will beat that and definitely crush them on year which is my plan with these shares. to have that many subs already is strong for swtor and I anticipate that will only increase as they improve the game.
Lol! They do have a great lineup and they are going to be the strong in 12 & 13. You want to invest in TTWO as well> They have a very strong lineup and The Darkness 2 is a HIT! Add Bioshock and a new GTA..watch out!
OMG! Why would you think that a company as unbelievably diverse as Electronic Arts, that does $5billion a year in revenue that is going up year-over-year would in ANY way be reliant on one title!! They made 1.65 BILLION DOLLARS this quarter. $120million was from SWTOR! They would have beaten on the top and bottom if SWTOR never even existed! Fool!
Because they are not making money. What good is rising revenue if you are doing it at a loss? ToR is a big deal because MMO's provide huge returns if they succeed. Their margins are much higher, their income is more reliable, and that income stream continues for years. So if Tor succeeds then we might finally see a return to profitability but without it EA is clearly still losing despite all the good titles and revenue they have.
Right now EA is floundering. Their BV has dropped nearly 50% since 2008 and since we are not living in a vacuum, one has to question what their actual valuation is. When compared to the 1000000 of other companies out there, are they worth a PE of 70 (assuming 2007 earning)? PE 26(assuming 2006 earning)? How about a PE of 12.5(based on 2005 earnings)? Also given their unreliability of maintaining income over a the last 6 years, will I have one good year followed by 2 bad? Wouldnt I be better off investing in another stock? Those are the real questions. To me EA, without a WoW level MMO is still flopping without air. they are certainly not dead or in danger since they can downsize but I dont want to invest unwisely.
Have you actually listened to the call? They have many reasons to be proud of what they achieved this Q, beyond SWTOR.
Origin grows like crazy, leader in mobile (especially on iOS) and growing like crazy, new social games coming, synergies across IP platforms kicking in etc etc.
SWTOR is simply a huge icing on the icecream here. And in all likelyhood it'll do exceptionally well.
Sorry ive looked at the numbers up and down. Social gaming is declining so thats not going to be as big as anyone thinks. Their other games are doing better than the previous 2 years and thats a great sign but even with that they were in the red. Even with ToR they were in the red last year. Ive actually enjoyed a couple of their games including DA, ME, and more recently ToR though I got bored of that after 30 days. Like THQ, im looking for the silver lining. ToR is the key. If it doesnt grow the next 45 days then the PPS is going nowhere the next 3-4 years and there is great risk of decline.
See... what did I telly you ;-)~ Its not that im bashing EA its just that the pop was not really justified. At least not yet. Ive been around the market long enough to recognize these things. Usually the short term 10%+ pops that hold are when a companies earning increase dramatically for whatever reason. 10% pops based on speculation almost never hold. Right now EA is all speculation.