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Electronic Arts Inc. (ERTS) Message Board

  • monkabc3 monkabc3 Jan 27, 2012 12:26 PM Flag


    Well, EA has traded down from a pretty solid floor at $21.50 to now what seems to be a floor at $17.50 on pretty much no news, neither positive or negative. Hard to imagine that a top level exec getting poached would knock a stock down this badly. Is this simply 'history repeating itself' where last February earnings call there was a big sell off prior to ER? It was ranging between $17.50 and $19.50 then got sold down to $15 the day of the ER if I remember correctly.

    So, anyone want to chime in on what their thoughts are for earnings? Personally, I can't see how they don't come out with a big beat nad a positive forecast with ME3. They guided low last quarter, setting the bar low. SWTOR seems to be doing fine, digital has GOT to be huge as can be seen from Apple's revenue numbers. Extra revenue from PopCap, BF3 must be close to 12-15 million units sold. Plus all their other titles. The American consumer was strong over the holidays, I doubt the European banking mess is really going to effect video game sales. Ideas? Fine if you say $15 just back it up.

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    • so you bought on margin? crazy.

      i'm adding to my position today, but i expect the earnings call to be a mixed bag. the reason i want to add to my position is that next quarter is going to be epic, with Mass Effect selling huge, Star Wars will start to solidify and grow, strong sales of BF3 still going. EA spent heavily on marketing to launch BF3 and SWTOR, so dont expect upside to the earnings. This past year EA launched 2 franchises that will be among their core franchises for years to come (BF and SW). ME will be the third franchise to join Madden and FIFA. I also expect them to keep their expectations for next quarter conservative, so they can blow the number away.

      the stock is not moving up right now because there is still alot of concern about earnings. but that will be behind the stock this week and then investors will be looking at a much brighter future.

      remember EA has been investing heavily in a transition to new business models over the past 3 years. those investments will just start to bear fruit this year and then next. smart investors place their bets before it is clear to the rest of the investors that the transition has happened.

      hold some dry powder in the keg just in case earnings are missed. that will be a huge buying opportunity if it goes down further, before the rise into March quarter.

    • Earnings are going to reflect the downturn in the game industry.
      Expect gradual valuation decline below $15 by summer.

    • Hey Monk, there is no news so the discussion will just be repetitive until new news comes out. Is there really anything that could be said that would sway you? If you're not in the stock, what are you waiting for really? The stock has sold off on very flimsy reasons; for the rational investor who thinks the company has good prospects there is one response to the sell off.

      Buy what you are comfortable holding.

      In my mind, reasonable max loss from here ($18.15) if I hold for the short term is 20%, only invest as much as you can accept losing 20% on it.

      • 1 Reply to trader_brad
      • Just wondering what I am missing in the sell off from $21. If the market is willing to sell down to this level on no news, what is it's reaction to a good ER? Indicies are peaking at all time highs amid international turmoil are are set for a serious correction. Dude, I am WAY out of my comfort zone. I'm in at $22.51 and just trying to make some back. I am holding, but am dumbfounded by this $17 PPS. The company is doing great I have never seen such a polar reaction to a company that is expanding. It seems that SWTOR was a PPS kille r, even thought it is a success. I simply don't get it and I have been doing this for a living for 11 years. EA doesn't make sense at this point and that is taking me beyond my comfort zone and into irrationality. When I see people taking about buying 100's of shares at $18 and worrying about it makes me chuckle in grief. I've got 50,000.

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