The ERTS buyout of Bioware, although a good company on its own, was too expensive too late. Obviously they will take the properties of Bioware and Pandemic and release sequel after sequel until the well runs dry, but this hardly justifies a price of almost a billion dollars on the two studios. Through the years I've seen several growth companies fail to grow and begin buying companies to create the illusion of growth. This seems to be happening at EA.
If Mass Effect sells 600,000 units at 59.95, the revenue is 36 million. If EA can somehow keep all of the talent from those studios to stay for the next 5 years, they will break even on the investment long term. But experienced programmers and designers will be offered big bucks by other studios and will jump ship in that time period, thus decreasing the long term benefits of owning the two studios.
Earnings expectations tonight have spared ERTS a thrashing in today's selloff. Better hope there is something in the EPS that justifies the institutions holding on today. They will be the first ones to jump ship in the after hours if EA isn't showing strong growth. A P/E this high is scary to institutions in a falling market.
Good luck on the acting thing though. It is a huge crapshoot no matter how good you are. For every Russell Crowe or Deniro, there are hundreds of great actors (at least) that never make it, not to mention the tens of thousands of others who clog up the works actively trying...
You could probably get on Jeopardy or Wheel of Fortune pretty easily though if you came to LA. Check out the Sony Television website. As for Amazing Race (which by the way is a co-production with another network/studio), don't know how you could get on that. You might want to keep your wife happy and stay where you are...or at least keep your wife happy...that will offer you a greater return than any stock ever can...
"Can't really talk about my work publicly"
--> That's ok, just email me and I'll let you know if I'm available for an acting gig (like CSI and some of the reality shows) If you can give me a hint as to how to get on "The Amazing Race" I'll drop everything and drag my wife along for the ride lol. Take care.
Can't really talk about my work publicly. I'm pretty low level anyway, so I don't really know much, but every network is part of a large public company, so I don't think it is my place to talk about anything too job specific even if I knew anything of value. Sorry.
But I am bullish on EA as an individual investor. Maybe too bullish, to my material financial detriment. Again, damn Sony!!!
<"Obviously they will take the properties of Bioware and Pandemic and release sequel after sequel until the well runs dry">
--> So you have a crystal ball... It all makes sense now (obviously). LOL
<"I've seen several growth companies fail to grow and begin buying companies to create the illusion of growth.">
--> And not "one" that actually "did" grow through those acquisitions? Amazing.
<"experienced programmers and designers will be offered big bucks by other studios and will jump ship in that time period">
--> Oh yes. Even though they've most likely been offered those "big bucks" over the past few yrs they will obviously change their strips now and actually take the offers, pack up the kids, pets, change schools, sell the house (in a depressed mkt), and move on. Obviously...
<"Better hope there is something in the EPS that justifies the institutions holding on"> / <"A P/E this high is scary to institutions in a falling market">
--> Good thing there is. More importantly however is that the "something" that institutions are looking for isn't in the eps. It's in the "outlook"... The same thing goes for the p/e; you are seriously lacking in mkt knowledge if you think savy institutions aren't looking at fwd p/e numbers (not the "yahoo" ones either"). They look at a fwd p/e and see a growth opportunity (just like someone in a recent post I read who has posted many insightful posts irt erts valuations). Too bad you (and numerous other amateurs) can't.
Weak arguments defend their positions by calling their detractors names like you did just now. Just out of curiosity, at what price does ERTS prove you wrong and my conjecture correct? If it hits the bottom of the 4 year range I mentioned in the next couple months, will you retract and apologize, or continue to say ERTS is a solid investment as it falls?
Problem is they don't believe the forward numbers anymore given credit market issues, housing bubble bursting, etc. It will be a lean xmas, and these stocks are too expensive. The post earnings action tells you that "loud and clear". ERTS is a cyclical growth company in a weak cycle for earnings and for retailers generally. Next year's numbers are a guess at best and don't represent this country's reality. Falling dollar forces capital outflows represents a weak economy/society. Our comeuppance is near. When GOOG and China pop it's look out below time!
Minus a breakout above 60 again, ERTS is back in its 4 year range, the bottom of which is 47 from july. All of the buyers the past 4 months must now decide if their money is better allocated somewhere else since they are up a good amount in 4 months.