Ah, I wish I was in your boat Dale, I went all in a while ago and am waiting this out. If you are lucky enough to grab a $19.50 cost base, I would say do it. EA has always shown support at $19 and change. I don't see much risk at this price, volume is back to good, so people are buying.
I agree with your analysis. The question for the day/week/month is: When will the "zynga effect" be over and EA pps bottom out so that we have a nice entry point to get back in before the next ER. I too expect a really good report with a sizable positive effect on pps; the problem is pps from where? Good luck to all. dales53
IMO, it is a value stock once the ER comes out. Sorry for not disclosing the forward looking statements. And it is a growth company because of its social and digital developments and because it continues to strive to create organic growth via games like SWTOR.
It is undervalued at $19. It is taking a beating because a little game company that makes a couple games and is completely tied to facebook for their revenue, that has a huge risk factor went public with too high an offering. EA is getting beat down because of that?! It is ridiculous, it just shows how the investment community doesn't understand the gaming industry. To say that EA and Zynga are apples to apples is absurd. And one effecting the other's PPS is asburd. This is once again another Jeetil Patel move, re-iterating a sell with a $12 target the day before earnings where is turned out (surprise, surprise!) to be a blow out.
It is also taking a beating because the market was supposedly looking for revised guidance, I guess you have to work on wall street to see that one coming... Thanks to JR and Brown for not stepping up to the plate for that one. They would rather see their PPS erode on no news until they can surprise at ER... Like children. So instead of maintaining $23 then going to $26 we go from $23 to $19 then back to $23. Joy!
growth and value? Growth usually indicates an above average PE which is deserved due to growth much higher than its peers. Value usually indicates a fair or low PE which will get you a decent but not great return. Can't really be both IMO.
I saw that on December 26, which from the sale of the game itself should provide a great bump for their quarterly revenue numbers (if they chose to include it). But after the 30 days free, people will have to decide whether or not to break out that credit card an sign on for $15 per month to continue playing. I am not a MMO expert by any means so I don't truly know if the 375,000 peak users is a good thing or a bad thing. Does that mean that 375,000 Americans play it during N.A. time zones then 375,000 play it during EU time zones which means they have 750,000 people playing it or is it merely saying that 375,000 is the most that play the game? Either way we were all hoping for 1.5+ million players, which is what sold but are not continuing to play.
But that said, like many have said on this board, SWTOR even with good success wouldn't really make a big impact on their total revenue number. So if people are selling down to $19 because of a poorly performing SWTOR, they are forgetting a whole year of digital expansion.
The isn't true. The game was mostly sold out everywhere. Sales were down in the 2nd week because EA was limited supply on purpose. The game has set every new MMO sales record and is probably at about 2 million subscribers and growing. It is everything we thought it would be.
If the sell-off is related, then it is ill-informed.
So what is the floor for a pessimistic EA? If SWTOR, doesn't get traction in MMO, (all the rest is pretty unbelievable but...) if digital is down, if BF3 sale don't shine, what is the target for EA? It range traded between $17.50 and $19.50 a year ago. Is that the new range? Are all 2011 moves going to be ignored? Seems a bit ridiculous. But here we are on another up day for the markets and EA at $19.25. Seems a bargain for a $21 stock. Before it was an EU issue, now there is no excuse for people selling at this level. At least volume is back.
No kidding. The only thing that I can think of is that Zynga's IPO is the worst thing that has ever happened to EA. Bad IPO = EA $23->$21. Any bad news regarding Zynga seems to make EA PPS dump. It is ridiculous, but here we are. I have gone from very confident to now a little nervous about the ER. They do screwy accounting and could turn a great quarter into a neutral one. The large volume sell off as EA broke through its floor of $19.90 to me seems like a computer based trading issue. From the one day chart is looks like about 5 of the 7 million shares traded in the last 1.5 hours, that should gain some attention for tomorrow.