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Electronic Arts Inc. (ERTS) Message Board

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  • monkabc3 monkabc3 Nov 29, 2012 2:22 PM Flag

    Good time to short?

    What "garbage"? What you consider "garbage" a lot of people buy and enjoy playing. Might not be the absolute most amazing game of the year but "garbage"? Get some realism. It has had a big run up from 10.77 and probably will have a retrace. I don't think a big one. Those people who sold at $11 and $12 are feeling the pain. This stock should range $17-$19 on a bad day and $21-23 in a "normal world". Zynga and SWTOR are behind them. Origin revenues should be interesting on the next call.

    IMHO.

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    • xtgeminiman@ymail.com xtgeminiman Nov 29, 2012 3:07 PM Flag

      EA is widely known to phone it in to meet deadlines, release the same game with little changes and run acquisitions into the ground (Bioware comes to mind).

      Their balance sheet is hideous. They are burning through cash and adding debt and making it up with "goodwill". G&A and development costs have skyrocketed while R&D has gone down. Not good for a game company.

      Too many tailwinds in this industry. Gamers expect more for the same price. Development costs are rising while the volume of games sold is declining. I remember my mom paying $40 (sometimes $50) for an NES game 25 years ago that was made by 10 people. You can't do that anymore.

      This is a tough industry where a couple mistakes can sink an entire company. SWTOR isn't going to bury EA but it's tough out there.

 
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