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Activision Stock
Hey guys,
Activision ATVI stock is currently at 27.46. I think Activision is a great stock to buy. They are currently merging with Vivendi’s games business unit and the merger is expected to be complete by the beginning of 2008. Folks Activision is currently on a 52 week high and i’m telling you the stock is just going to continue rising especially with the merger of Vivendi. If you folks aren’t familiar who Vivendi is they are currently known for running one of the best PC game makers in Blizzard. Activision and Vivendi plan on releasing a Activision Blizzard group. Blizzard is famous for titles such as Diablo, World of Warcraft and the ever so famous Starcraft along with many other great titles. Starcraft 2 is currently being worked on and should be released sometime in the future. I dont know if you guys know much about video games but for instance right now World of Warcraft is the number 1 played game in the world. They have probably something close to 15 million players right now paying 15 dollars a month to play that game. Starcraft and Diablo were also two huge hits of Blizzard and they will be coming out with new additions to both games in Starcraft 2 and Diablo 3. A new starcraft game has been in the works for a long time and people though the project was dead but they have recently released the news of the release along with video and screenshots and other things. The the release of Starcraft 2 and Diablo 3 along with the ever growing World of Warcraft I would say activision is a safe bet for a good stock and you can expect some nice steady increase with the release of the new games.
Let me know what you guys think about this stock. I gotta say there is no video game creater that comes close to blizzard when it comes to followings. Not to mention Activision on there own makes amazing games. I think it’s a good buy.
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ErnestoT
at 12:43pm on Mar 6, 2008
EA stock is currently at 47 dollars.. Look for the competition to really heat up between these two companies. Blizzard is really going to be a huge boost to Activision.
sergik12
at 01:52pm on Mar 6, 2008
You know who will get all the benefits from the competition? Gamestop.
Short answear I like ACTIVISION there is a lot of good momentum behind the stock and you can’t hate the recent pullback, just gives you an opportunity to get into the stock. I will have to do more analysis and will post something latter.
ErnestoT
at 02:16pm on Mar 6, 2008
Another thing to note. The world of warcraft addiction right now is pretty crazy with a background of players selling there own accounts or paying real money for fake gold in the game. China alone has player farming systems where they pay players to “farm” gold so in return they can sell it. It just shows how crazy people are when it comes to these types of games. Blizzard also constantly releases expansions which of course everyone has to buy so along with paying 15 dollars a month to play the game they are also paying $50 for the expansions to keep up with everyone everytime there is a release. Remember there is currently around 15 million currently paying for the service and that’s just world of warcraft alone.
With Starcraft it was probably the single largest competitive game with millions of players competing in this game. There were many players who had contracts to play this game competively. I’m sure with these leagues and video competions happening in the big screen they have to pay activision for the use of the game. The market for these type of games is huge over in asia because they televise it on tv and pay out large prizes. You guys will think i’m joking but i’m serious when I say that professional video game players over in asia are as popular as regular athletes.. it’s pretty sick…
The market for gaming in Asia is a huge and right now Blizzard has and probably always will have the upper edge when it comes to that market. This is one of those things where I think I have a little edge because I know so much about the video game community and it’s followings. The release of Starcraft and Diablo will be scary when it comes to numbers.
vadim.vintsevsky
at 02:44pm on Mar 6, 2008
From what your saying it looks like a great idea, one questions because i dont have time to look at it now. Is the merger definatly going through?
ErnestoT
at 02:56pm on Mar 6, 2008
I’ve done google search after google search and I dont see any opposition. I think the reason for that is because EA is so huge that they will be a direct competition to Activision. There’s no way for the deal to become a monopoly or anything like that. The deal will be a reported 18.9 billion merge and Vivendi will own between 52-68 percent of Activision Blizzard.
I’ve been reading that stock holders / analysts are very happy with this merger but on the other hand the gamers themselves are a little dissapointed because they are afraid that the merger could possibly bring down the quality of blizzard games. I dont think this will happen because it seems that blizzard will have most of the power.
vadim.vintsevsky
at 03:13pm on Mar 6, 2008
Just took a quick look at their stuff and they seem good. Good 2007 numbers. However, i do not know if they beat/matched/didnt match their expected returns. The one thing I am a little worried about is some of their ratios. mainly profit margin ROA and ROE. All three went down a good amount in the last year. I am sure they talked about this in their year end report, so that would be interesting to read.
sergik12
at 01:21pm on Mar 7, 2008
In terms of products I love activision. There a lot of new games that coming out soon, Call of Duty MMO and StartCraft2 just to name a few. ATVI is also going to imbed adds into the games, this is a brilliant idea as long as the adds do not overwhelm the game play.
Pure stock analysis, 25.3 forward P/E which is high for a value company but very appropriate for a growing firm. Earning revisions have been revised up recently and are up year over year. Strong long and short term momentum is a good sign since this is a growth stock. Recent pullback is makes it much easier to buy then before. The stock is getting rather popular with trading volume hovering around 5 million shares a day so you need to watch out for speculators. They have only generated 400 million in free cashflow last year, for a company that worth 8 billion dollars that is low. But this is expected due to their excellent growth. I would expect them to generate more cashflow in the future and be an excellent investment. I do love the fact that they have no debt but they need to stop issuing shares. Long term I like it but as soon as the stock starts breaking down I would be out. I am also worried about the lack of new game systems in the near future.
Just my 3 cents
ErnestoT
at 02:16pm on Mar 7, 2008
Excellent review Sergey. I know Starcraft 2 and Diablo 3 will be insane hits when they come out as far as the gaming community for blizzard. Your also right about activision there other hits lately seem to be dead on and really good. COD4 and Guitar Hero right now are as popular as it gets. This merger with blizzard I think will prove to be a great thing.
Thanks for taking the time to really analyze the stock for us. Much appreciated!
sergik12
at 03:19pm on Mar 7, 2008
Anytime, I like questions good questions so keep them comming.