I don't know, but that will happen. All of the insiders who got the stock cheap will dump it as soon as they can. Instant profit for them.
It's not new news. It's no secret that WoW numbers have been declining for a while and CoD pre-orders are lagging previous years. I saw an article a while back speculating that the lower CoD numbers were due to GTA V as well as franchise fatigue. They also have Skylanders competition from Disney now, a lot of debt they didn't have before, and rather quiet releases from Blizzard. The problem with banking on a few huge franchises is that when growth stops and sales start declining, there's not a lot of hope for upside until they can come up with another huge franchise to suck dry. There will also likely be increased trading volume once insiders who started ahead in the share buyback deal can unload shares that were once snugly sat on by Vivendi.
Probably profit taking after the jumps. Also, the jumps were based on the deal news, but not all the news for ATVI is good. WoW and CoD numbers are not encouraging.
And yet it's red today and about $1.30 off it's high from the Vivendi deal news... and falling. Shorts are making money on ATVI right now. Just accept it.
I've heard this story before. In a few months we might be looking back and saying "Remember back during the summer when people were actually buying this stock over $15?" I used to be an ATVI cheerleader, but especially after the Vivendi deal, a lot of what made ATVI so attractive is gone. Their debt-free status is gone.Their cash pile is diminished. After the deal and earnings all there is to focus on is business as usual, and the news isn't great in that area. I'm not surprised to see reports of insiders dumping the stock. They certainly don't want to wait for the stock to go to the 20s... because it probably won't get there. Call of Duty is old news and record-breaking numbers are expected and baked into estimates. What happens when and if the competition this year causes a decline in sales over previous years? Expect a sharp sell-off and a bandwagon of downgrades.
I love how these analysts upgrade the stock and raise the target price, but tell investors the stock will fall significantly first and to wait to buy. The stock is well off its highs and falling. Sounds like some investors are just trying to justify their trades. ATVI is overbought, plain and simple.
All I have to say is think about what targets meant for the company for the last five years... Nada.
What is this compelling story? That WoW is losing subscribers left and right? That they are now laden with expensive debt to pay for their buyback from Vivendi? That profits this quarter are less than half of what they were a year ago? That they are facing new competition from Disney and GTA5? That most of their cash is in foreign accounts that would be taxed into oblivion if they were ever to repatriate? That up to 170 million shares will enter the trading realm as soon as Kotick and other insiders get the chance to sell?
Sounds like a short trade to me.
Well get ready for up to 170 million new shares in the open market as soon as Kotick and his group of private insider investors get a chance to sell. ATVI was better off with Vivendi sitting on those shares, diluted or not.
This Vivendi deal will be remembered as the turning point that turned a cash rich company into a debt-laden one. Why does everyone act like Vivendi was ruining Activision? Do you think they wanted to lose money by making Activision fail?
Kotick as well as other private insiders are buying the stock at $13.60, a significant discount before the jump, but now a massive gain. That means that 172 million shares that would have just been sat upon by Vivendi will flood the market as soon as these insiders get the chance to sell. What is that kind of increased trading volume going to do to the stock?
Activision now has debt. ATVI bulls have long touted their lack of debt as a major reason for buying.
WoW subs plummeting.
Other franchises aging.
Don't be fooled my friends... Bad news is coming.