CEO Change Could Boost Electronic Arts (EA) Prospects, Shares (ATVI) (ZNGA)
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Electronic Arts (Nasdaq: EA) is slumping Tuesday following the abrupt departure of John Riccitiello as CEO, which will take effect on March 30th. The stock is down about 8 percent on Tuesday's session.
Brean Capital is hitting the nail on the head today in saying that the move might be a positive for the stock.
According to Electronic Arts' release, Riccitiello rejoined the company as CEO in April 2007 when shares were going for about $52. Currently, Electronic Arts is at about $17, down 67 percent from when Riccitiello rejoined the company.
Seeing a sympathy move today are Activision (Nasdaq: ATVI) and Take-Two Interactive (Nasdaq: TTWO). All three companies have been hit as more and more consumers have made a transition to playing more games on mobile devices versus a Microsoft (Nasdaq: MSFT) Xbox, Sony (NYSE: SNE) Play Station, or Nintendo Wii. Though the three are moving into mobile more, they lag smaller developers in overall exposure.
One notable company also making a stronger push further into mobile is Zynga (Nasdaq: ZNGA). Having started as a company offering a virtual poker game, Zynga took off with its 'Ville' offerings on Facebook (Nasdaq: FB), with 'FarmVille' being the most well-known version. During the same time last year, Zynga moved to acquire OMGPop, Inc., which made the popular mobile game 'Draw Something'. Around that time, the company also said it would be spending billions to do deals similar or larger than the one for OMGPop.
In any case, today's weakness might be a buying opportunity for Electronic Arts. The company bought PopCap Games in 2011 for about $750 million and acquired JAMDAT Mobile back in 2006. Though shares have recently been weak, the company has the firepower for a strong mobile presence and a refresh at the CEO position might be just what the company needs for it to get back in the game.
Brean Capital is hitting the nail on the head today in saying that the move might be a positive for the stock.
According to Electronic Arts' release, Riccitiello rejoined the company as CEO in April 2007 when shares were going for about $52. Currently, Electronic Arts is at about $17, down 67 percent from when Riccitiello rejoined the company.
Seeing a sympathy move today are Activision (Nasdaq: ATVI) and Take-Two Interactive (Nasdaq: TTWO). All three companies have been hit as more and more consumers have made a transition to playing more games on mobile devices versus a Microsoft (Nasdaq: MSFT) Xbox, Sony (NYSE: SNE) Play Station, or Nintendo Wii. Though the three are moving into mobile more, they lag smaller developers in overall exposure.
One notable company also making a stronger push further into mobile is Zynga (Nasdaq: ZNGA). Having started as a company offering a virtual poker game, Zynga took off with its 'Ville' offerings on Facebook (Nasdaq: FB), with 'FarmVille' being the most well-known version. During the same time last year, Zynga moved to acquire OMGPop, Inc., which made the popular mobile game 'Draw Something'. Around that time, the company also said it would be spending billions to do deals similar or larger than the one for OMGPop.
In any case, today's weakness might be a buying opportunity for Electronic Arts. The company bought PopCap Games in 2011 for about $750 million and acquired JAMDAT Mobile back in 2006. Though shares have recently been weak, the company has the firepower for a strong mobile presence and a refresh at the CEO position might be just what the company needs for it to get back in the game.
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