UbiSoftologist
Member
Source: The Mercury News (link )
Source: Associated Press (via The Mercury News)
Redwood City video game maker Electronic Arts rose $4.50, or 8.4 percent, to $58. EA gained from speculation it may buy the 80 percent of French game maker UbiSoft Entertainment it doesn't own, according to Southwest Securities analyst Arvind Bhatia and Pacific Crest Securities analyst Evan Wilson. EA bought 19.9 percent of UbiSoft in December. Wilson rates EA shares ``sector perform'' and Bhatia rates them ``strong buy.'' Neither owns them.
Source: Associated Press (via The Mercury News)
DWIGHT OESTRICHER
Associated Press
NEW YORK - Shares of Electronic Arts Inc. rose 8.4 percent in heavy trading Monday as the stock caught up to the gains of other video-game makers, and rumors spread that it might be close to acquiring Ubisoft Entertainment SA of France.
From the end of April into June, as the video game makers reported earnings for the first three months of the year, the stocks of THQ Inc., Activision Inc., and Take-Two Interactive Software Inc. have made gains, noted Wedbush Morgan Securities analyst Michael Pachter.
Meanwhile, shares of Redwood City, Calif.-based Electronic Arts have stayed about the same, closing at $53.50 Friday from the $53.39 of April 29.
"I would say that what you are seeing today is a narrowing of the valuation gap," Pachter said. "Momentum investors saw that Electronic Arts was lagging and forced it up," and short sellers got squeezed as well.
Shares of Electronic Arts rose $4.50 to close Monday at $58 on volume of 11.4 million, compared with average daily volume of 5.5 million on the Nasdaq Stock Market.
There was also a rumor making the rounds of trading floors that Electronic Arts, which has a 20 percent stake in Ubisoft, might buy the rest of the company. Ubisoft Chief Executive Yves Guillemot said in The Wall Street Journal last month that the company was open to being acquired by a traditional media company. However, he again said he was opposed to Electronic Arts getting a stake in the Ubisoft and that Ubisoft wouldn't be a good combination with Electronic Arts.
"The general feeling is that Ubisoft would be a fairly accretive transaction," said Harris Nesbitt Gerard analyst Edward Williams. "The synergies they would get would contribute" a healthy amount of earnings before interest, taxes, depreciation and amortization.
Neither Harris Nesbitt Gerard or Wedbush Morgan Securities have investment banking relationships with Electronic Arts, and none of the analysts own the stock.
An Electronic Arts spokeswoman said the company doesn't comment on the stock price or rumors about the company.