Author Topic: ATVI - Activision Blizzard  (Read 28453 times)

Green King

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Re: ATVI - Activision Blizzard
« Reply #10 on: August 17, 2012, 10:05:03 AM »
There is no question Blizzard is the best there is in terms of games and business strategy. Most of my childhood was spend on playing their games. But is it a good investment ? At this price i don't know. Also what are their returns like per game ? since it take years for them to come up with game. Do you know their return look like for a new game ? D3 WoW SC2 ?
GK


eclecticvalue

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Re: ATVI - Activision Blizzard
« Reply #11 on: August 17, 2012, 06:52:00 PM »
At this price I don't think ATVI is a great investment. IMO ATVI is priced in. Because you have a timetable of these releases so the market can incorporate it into the stock price. When Diablo 3 was released, the market did not swing wildly to the upside.  Also gamers are getting into the stock market so they have sense whether these new releases will do well.Therefore, there is no edge. The case from the bulls is that ATVI can keep on growing and the earnings power increases. I don't think the earnings power will be consistent since the best games such as the forthcoming Starcraft expansion packs take a long time to create. Since Blizzard takes a long time in developing games you are bound to see delays. Therefore, no consistency in the earnings. The Activision studios have not created new franchises in a while so future earnings potential is diminished for the time being. It seems like ATVI's strategy is to create a franchise which has traction among gamers and milk it by creating sequels. Kind of like what Hollywood is doing. Gamers may become tired of it. There is dissatisfaction in the community.

   One thing that has not been mentioned is goodwill makes up majority of the assets and stockholders equity. I don't think there is margin of safety in the balance sheet. I would check the accounting policies on goodwill to see if they have changed it, ATVI may have to realize goodwill write downs in the future.
« Last Edit: August 17, 2012, 08:54:02 PM by eclecticvalue »

mikazo

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Re: ATVI - Activision Blizzard
« Reply #12 on: August 18, 2012, 06:29:38 PM »
Green King and ecclecticvalue both make good points. I never thought of trying to figure out return on invested capital on a per-game basis. I suspect that even inflation might come into the picture due to such long time horizons for franchises as a whole. It is also a good point that goodwill makes up a significant portion of the total assets and has been slowly declining for quite some time. Blizzard states that they're working on a brand new MMO, but will it turn into a profitable franchise? Very difficult to tell.

I used to play video games quite a bit when I was younger, but part of the reason that I stopped playing them is that all games seemed to be a different spin on one of a few standard genres or styles, and nothing was new or innovative. The other reason I stopped playing is that I grew up and now have a lot more responsibilities. :)

I've been letting my thoughts on ATVI mull around for about a week now and I've decided that there are too many questions and uncertainties in my mind to commit to a purchase. From what I've read from interviews with Bobby Kotick, he doesn't strike me as the type to put shareholders very high up on the priority list. That, plus his employment agreement and the concerns stated by others in the posts in this thread led to my decision to pass on ATVI.

T-bone1

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Re: ATVI - Activision Blizzard
« Reply #13 on: August 18, 2012, 06:43:31 PM »
I think part of the reason for the high valuation is that assumption that vivendi will sell ATVI in the near term.

mikazo

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Re: ATVI - Activision Blizzard
« Reply #14 on: July 26, 2013, 05:33:51 AM »
I think part of the reason for the high valuation is that assumption that vivendi will sell ATVI in the near term.

Activision Becomes Independent With Buyout of Vivendi

http://www.bloomberg.com/news/2013-07-26/activision-management-to-buy-vivendi-stake-for-8-17-billion.html

NomadicRiley

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Re: ATVI - Activision Blizzard
« Reply #15 on: January 20, 2014, 06:59:56 PM »
One of the interesting things about the ATVI / Vivendi transaction is it has the net effect of retiring ~1/3 of the previous outstanding ATVI shares.  ATVI purchased the shares at $13.60 each using a combination of cash, issued debt and bank loans.  The CEO and Chairman also formed a group w/ institutional investors and bank loans to buy ~25% of the company also at $13.60.

Net result should be that for the same financial results, all the per share numbers should increase by ~25% when taking into account the reduction in shares + incurred interest on the debt.

eclecticvalue

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Re: ATVI - Activision Blizzard
« Reply #16 on: January 20, 2014, 07:35:05 PM »
One thing I forgot to realize was the Vivendi stake in atvi suppressed the stock price. Correct me if I am wrong.

mikazo

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Re: ATVI - Activision Blizzard
« Reply #17 on: November 03, 2015, 05:43:07 AM »

blainehodder

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Re: ATVI - Activision Blizzard
« Reply #18 on: November 03, 2015, 07:29:07 AM »
Very cool anecdote on Hacker News this morning:
Quote
I met Bobby Kotick (Activision CEO) as an Intern at Activision in 2008 and I asked him specifically if they were considering getting into "casual games" which were just starting to come into their own.
I'll never forget his answer: "No one has figured out how to really make money with casual games yet, but once someone does, we'll just buy them."