Has anyone spent time taking a close look at this company? I’m especially curious if anyone particularly loves/hates this at $67/share

Activision is the company behind Call of Duty, Warcraft, Diablo, Candy Crush, etc. I know they to have a very loyal customer following.

Over the past 6 months, the stock has traded down approximately 30% from $100/share. Given a history of +5-10% revenue growth, and over $3.5/share of cash flow, this seems potentially quite attractive

Reasons for the sell-off that I can see: 1) Sexual harassment lawsuit and claims of unequal gender pay; 2) delays around Overwatch and Diablo IV making for a lengthier period before the next revenue growth acceleration

$3.5 / $67 = +5% yield. Assuming no multiple expansion, 5-10% growth results in 10-15% IRRs on a multi year basis.

In terms of multiples, the company has treaded 20-30x cash flow historically. If the multiple improves from its current ~20x, that’s incremental return from there

Appreciate any and all thoughts, especially those who can make a good argument for why this is a terrible investment!

~~ Activision Blizzard vs Electronic Arts ~~

I want to add to my portfolio a gaming company, so I decided to take a closer look at the gaming giants - Electronic Arts and Activision Blizzard, I decided to choose only one because I want to keep my exposure levels to this sector to a minimum.

Feel free to agree / disagree with my research + My personal opinion will be added to the 1st comment. **resources note** ~ At the bottom of the post !

Intro:

In my opinions both companies are very interesting, on the EA side, you will find many beloved games such as: FIFA, MADDEN, UFC, NHL, BATTELFIELD, MEDAL OF HONOR, etc… (Fun fact: FIFA 21 for sold 325 million copies!)

But on the ATVI side you may find games like : CALL OF DUTY ( Modern Warfare 2 sold 25.02 Million copies) CRASH BANDICOT, WORLD OF WARCRAFT, DIABLO, CANDY CRASH, etc…

So, lets dig into the financials!

> Financial Comparison- (2020 + 2021)

~ Companies overview ~

Market cap: $64.106B (ATVI) VS $40.678B (EA)

Revenues (2020): $8.09B (ATVI) VS $5.54B (EA)

Cost of Revenues (2020): $2.26B (ATVI) VS $1.37B (EA)

Gross Profit (2020): $5.83B (ATVI) VS $4.17B (EA)

~ Key metrics comparison ~

Revenue per share (2020): $10.96 (ATVI) VS $18.90 (EA)

Net Income per share (2020): $2.84 (ATVI) VS $10.37 (EA)

Cash per share (2020): $11.19 (ATVI) VS $19.57 (EA)

~ Ratios comparison ~

Gross Profit margin: 2019 67.73%, 2020 72.05% (ATVI) VS 2019 73.29%, 2020 75.28% (EA)

Net Profit margins (2021): 29.17% (ATVI) VS 14.87% (EA)

Return on equity (2021): 17.72% (ATVI) VS 10.68% (EA)

~ Balance sheet comparison ~

Short Term debt (2020): $25M (ATVI) VS $600M (EA)

long Term debt (2020): $3.60B (ATVI) VS $0.40B (EA)

Cash and cash equivalents (2020): $8.65B (ATVI) VS $3.77B (EA)

~ Growth analysis ~

The growth analysis is a quarterly comparison between 2019 to 2020 financials results- ( last quarter reported).

Revenue growth: 0.92% (ATVI) VS 15.23% (EA)

Gross Profit growth: 20.35% (ATVI) VS 2.59% (EA)

EPS growth: 41.44% (ATVI) VS 172.44% (EA)

Net income growth: 46.17% (ATVI) VS 198.23% (EA)

R&D expanses growth: -5.10% (ATVI) VS 10.04% (EA)

~ Analysts Comparison ~

ATVI: Based on 17 Wall Street analysts – 15 Buy 2 hold 0 sell

Estimates – low: $100, Average: $114.25, High: $125

EA: Based on 21 Wall Street analysts – 17 Buys 4 hold 0 sell

Estimates – low: $148, Average: $172.10, High: $195

Number of employees Comparison

why this is important ? recruiting employees growth indicated that the company still looking to grow revenues, expend to different locations, releasing new products.On the other hand, companies that layoff employees, trying to move to more lean business model, expanding their operations is not their first priority anymore.

2020 – 9.50K (ATVI) VS 11K (EA)

My Conclusion

Both companies show an extensive growth, whether its financial or popularity among their fan base, but after considering all factors, Activision Blizzard has the upper hand.

Even though, it may seems that EA release more games then ATVI, has a diverse library of successful games.

moreover, after looking at both companies financials and growth indicators, it appears that ATVI's revenue growth is much stronger than EA's, and with a bigger gross profit to be considered .. my winner is definitely Activision Blizzard

** Resources list **
- Financial Comparison
tipranks - Analysts data
- companies stats
- employees numbers

I saw this being discussed in a non-investing sub, was curious to see what people here think. I'm a big MSFT fan but not sure what to expect of this news.

MSFT is up 7% and ATVI is down 11% at the time of me posting.

Additional articles with mostly same info:

~~ Activision Blizzard vs Electronic Arts ~~

I want to add to my portfolio a gaming company, so I decided to take a closer look at the gaming giants - Electronic Arts and Activision Blizzard, I decided to choose only one because I want to keep my exposure levels to this sector to a minimum.

Feel free to agree / disagree with my research + My personal opinion will be added to the 1st comment. * resources note** ~ At the bottom of the post !*

Intro:

In my opinions both companies are very interesting, on the EA side, you will find many beloved games such as: FIFA, MADDEN, UFC, NHL, BATTELFIELD, MEDAL OF HONOR, etc… (Fun fact: FIFA 21 for sold 325 million copies!)

But on the ATVI side you may find games like : CALL OF DUTY ( Modern Warfare 2 sold 25.02 Million copies) CRASH BANDICOT, WORLD OF WARCRAFT, DIABLO, CANDY CRASH, etc…

So, lets dig into the financials!

> Financial Comparison- (2020 + 2021)

~ Companies overview ~

Market cap: $64.106B (ATVI) VS $40.678B (EA)

Revenues (2020): $8.09B (ATVI) VS $5.54B (EA)

Cost of Revenues (2020): $2.26B (ATVI) VS $1.37B (EA)

Gross Profit (2020): $5.83B (ATVI) VS $4.17B (EA)

~ Key metrics comparison ~

Revenue per share (2020): $10.96 (ATVI) VS $18.90 (EA)

Net Income per share (2020): $2.84 (ATVI) VS $10.37 (EA)

Cash per share (2020): $11.19 (ATVI) VS $19.57 (EA)

~ Ratios comparison ~

Gross Profit margin: 2019 67.73%, 2020 72.05% (ATVI) VS 2019 73.29%, 2020 75.28% (EA)

Net Profit margins (2021): 29.17% (ATVI) VS 14.87% (EA)

Return on equity (2021): 17.72% (ATVI) VS 10.68% (EA)

~ Balance sheet comparison ~

Short Term debt (2020): $25M (ATVI) VS $600M (EA)

long Term debt (2020): $3.60B (ATVI) VS $0.40B (EA)

Cash and cash equivalents (2020): $8.65B (ATVI) VS $3.77B (EA)

~ Growth analysis ~

The growth analysis is a quarterly comparison between 2019 to 2020 financials results- ( last quarter reported).

Revenue growth: 0.92% (ATVI) VS 15.23% (EA)

Gross Profit growth: 20.35% (ATVI) VS 2.59% (EA)

EPS growth: 41.44% (ATVI) VS 172.44% (EA)

Net income growth: 46.17% (ATVI) VS 198.23% (EA)

R&D expanses growth: -5.10% (ATVI) VS 10.04% (EA)

~ Analysts Comparison ~

ATVI: Based on 17 Wall Street analysts – 15 Buy 2 hold 0 sell

Estimates – low: $100, Average: $114.25, High: $125

EA: Based on 21 Wall Street analysts – 17 Buys 4 hold 0 sell

Estimates – low: $148, Average: $172.10, High: $195

Number of employees Comparison

why this is important ? recruiting employees growth indicated that the company still looking to grow revenues, expend to different locations, releasing new products.On the other hand, companies that layoff employees, trying to move to more lean business model, expanding their operations is not their first priority anymore.

2020 – 9.50K (ATVI) VS 11K (EA)

My Conclusion

Both companies show an extensive growth, whether its financial or popularity among their fan base, but after considering all factors, Activision Blizzard has the upper hand.

Even though, it may seems that EA release more games then ATVI, has a diverse library of successful games.

moreover, after looking at both companies financials and growth indicators, it appears that ATVI's revenue growth is much stronger than EA's, and with a bigger gross profit to be considered .. my winner is definitely Activision Blizzard

** Resources list **
- Financial Comparison
tipranks- Analysts data
- companies stats
- employees numbers

I have a 2023 expiration $85 ATVI call I’ve been holding a few months. News broke MSFT will be purchasing ATVI. What happens from here?

The UK’s CMA is due to announce their decision on Microsoft’s acquisition of Activision-Blizzard by this Wed 26th Apr. By all accounts and market professionals, the CMA is the last major hurdle and is likely to approve. The buyout will likely close in June at the $95 merger price. The EU is unlikely to block, and the FTC has no case and will lose in court if they go for a preliminary injunction.

So, if the CMA approves by Wed, the deal is almost guaranteed to close. The stock is currently at $85.53. What do you guys think about $92 calls expiring this Friday the 28th? New Zealand is also due to announce their decision on Friday, but that likely will have little bearing on the stock price.

Edit: mfw

Right when I was about to get my puts in.

In case you want to tune in, ATVI will announce their earnings for Q4 2018 today at 4:30 PM EST (22:30 CET) in a . Could be spicy.

Would that drive the stock up ?

Activision is currently around $75 a share with an accepted buyout from Microsoft at $95 a share. That’s a potential 26% arbitrage gain in a currently bear market. I guess the major risk involved with this is antitrust getting involved.

Anyone in this play or have any other reason to avoid it?

Hi All,

I am a long time player and consumer of ATVI (Activision-Blizzard) content.

The State of Things:

I am not sure how many of you are aware, but there is currently a mass exodus of players on World of Warcraft and Call of Duty due to many reasons. WoW is experiencing an exodus for a couple reasons; players feel they are not listened to, pay-to-win being added at extreme scale in both classic and the main game, and harassment issues in-game. Call of Duty players are leaving due to rampant cheating as well as a stale continuation of the same.

Competition:

For World of Warcraft- Final Fantasy has just taken over WoW for the first time ever as the MMO with the most active players and Blizzard reported the largest drop in subscribers ever.

Another good source- content creator "AsmonGold" has been documenting A LOT of the in game and internal issues on his YT channel.

For Call of Duty- It's mostly the cheating.

.

And both of them are facing the growing threat of big bad Amazon entering the space. It's coming after both of them in a way... Ex-COD players have begun streaming the game, and obviously it appeals to MMO players as well.

Lastly,

They've been having internal issues-

These are only going to get worse as many are saying its the tip of the ATVI internal iceberg.

Current position: 20 Sept 24 75 Puts

Thanks all! Look forward to seeing everyone's response. If someone who knows $ATVI numbers better could elaborate that would be great. This is purely a qualitative thesis.

I've been thinking about buying ATVI LEAPs. MSFT announced back in January their interest in buying out ATVI for $95/share. ATVI is currently trading at around $75/share. That $20 spread represents a pretty great opportunity IMO.

I understand that buyouts are not riskless opportunities (looking at you Musk/TWTR) but this one seems at least a bit more plausible. That $20 spread represents the risk involved (or at least the market's current assessment of it).

If I buy ATM LEAPs (thinking Jan '23 ATM calls) what are the downside risks? The only ones I can think of are:

1. Deal gets blocked by regulators,

2. Deal does not go thru before call option expiry.

What else am I missing here?

Edit: I wrote 'LEAPs' but TIL those have > 1 year until expiry. I guess I just mean long-dated calls.