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Electronic Arts Inc. (ERTS) Message Board

  • dales53 dales53 Oct 19, 2011 2:09 PM Flag

    ERTS pps anemic today........

    I know we've had a heck of a runup lately, but with earnings coming out next week, I'm still looking for a "last minute" charge upward. It seems that history of companies with higher than "expected" earnings have a nice runup into the event. What happens after, "who knows", depends on just how "spectacular" the call is. I'm a bit dissappointed today. Granted the overall market isn't helping, but EA should begin to stand out. Guess we'll just have to keep watching closely. dales53

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    • Come on, really? If that's a conflict then the government would strip MSFT of their own in-house game studio.

      There's no way the gov't would block it because there are plenty of viable competitors in the video game space.

    • if EA had problems selling their games, I would agree. EA is big as you get and people know when their games are coming out and their games are available everywhere. EA does not need the marketing muscle of MSFT. MSFT would not benefit from purchasing EA, so I doubt it would happen.

      The only way I see it happening is if EA started to get into a big groove with Social Gaming and Ballmer got overly excited and bought them.

      Origin is definitely a bonus, because you don't wanna pay MSFT or Valve, etc to distribute for you digitally.

    • listen, you make a good point and it's 100% a valid one

      but just like Microsoft sells MS Office and productivity/server tools for PC, iOS, Sun etc

      so to can they sell games of iOS, Droid, Xbox, Nintendo, Sony platforms

      Xbox has already outsold PS3 and Nintendo 15 of last 16 months

      in the US you're starting to see real marginalization of Sony & to some extent Nintendo in mobile

    • All 2012 titles available now for the PC running Windows and Xbox! Release dates for other platforms soon to be announced! All products optimized for Windows 8 and XBox 720! Yah, no conflict.

    • agreed.

      I also happen to think XBOX Live and Origin have HUGE synergies - 5 million users daily

      as consoles become less important and the cloud explodes you need to own CONTENT

      you need to have platform-agnostic IP that can be pushed down to iOS, Droid, XBOX, Nintendo Hardware, PC, Sony etc.

      no surprise to you all, but EA has the second best catalogue of gaming IP in the world

      ... after Nintendo

      EA could easily reside within Disney, News Corp, Viacom, Microsoft etc.

      digital is the future, regardless of 2008-2010 profitability issues and transition phase

    • Disney tried to buy them for $23 a share in late 2009

      this was confirmed to my through a sell-side analyst who used to work for Disney

      i think it would be a big transaction, they wouldn't take on debt to do something like this

      they have $30 billion in treasury shares on their balance sheet + cash to do M&A...

      Microsoft is interesting because Peter Moore (COO) and EA's current CTO are ex-Microsoft guys. They know the culture of Microsoft and gaming is CLEARLY an area MSFT will continue to invest

      there are a TON of synergies - content is king at the end of the day - MSFT could kill Sony and PS3/Vita in the West if they owned EA and continued to push gaming across all platforms iOS etc

      if EA can turn around its business next 24 months it would be an accretive addition to either DIS or MSFT

    • (re MSFT & ERTS) it COULD happen. It wouldn't be a massive conflict unless EA didn't have viable competitors.

      I don't think it would happen because MSFT cannot improve on ERTS. XBOX isn't a "bigger" platform to sell to a wider audience, ERTS' platform is as big or bigger.

    • I don't know if Disney has the war chest to buy ERTS. Perhaps a merger of some sort but I think Disney is too busy to be looking at ERTS right now. There is no way MSFT will buy ERTS overrated. Massive conflict. It will never happen.

    • Thanks to the both of you for the explanation. I didn't realize you could resell an option at a higher price. I thought the only way to make $ was to execute the option, buy the stock and sell it at a profit. This is interesting. Thanks again.

    • jgdeiter: Options are traded just like stocks. 1 Call contract controls 100 shares. The price depends on how the underlying stock is "acting" i.e. it's probability to go up or down. The "strike" price is the dollar figure that you would have the right to sell the shares for. (short explanation, but essentially it, for a more elaborate explanation go to the CBOE website and read more)

      As for me, I bought several different strike price calls in early 2011. Example, I bought some Jan. 2012 25 calls for an average price of .725 per share. Even with yesterday's terrible pps action, they are still being bid at $1.53. The main thing you have to know about options is that unlike trading the actual stock shares, you have a time period in which to either win or lose and if you don't make money, you lose it all. Nice thing is, example, the January 25 Calls that I bought gave me the profitability of many shares without having to shell out the large amount it would have taken to "buy" them. Out of the money calls have the largest profit possibility and the largest risk. If, however, you can get into a margin position in a stock moving up fast, your gains per dollar "invested/gambled" are 5 to 10 times those of the gains realized by the actual shareholder.
      Hope this careful out there, I think I've heard that approximately 90% of all options expire worthless.


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