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?

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.

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

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?