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The future of Activision Blizzard
So now that the news has broken, the CEO has been interviewed, and the dust has settled on this weekend's merger, it's time to ask the big question: Why? Blizzard and Vivendi are on top of the world in terms of their field right now. Why would they combine with Activision, especially if, as they claim, nothing at all is changing? Why go to all the trouble if it'll make no difference in either company's business?And the answer-- in my analysis-- is, as usual with most mergers: money. The fact is that Activision wants to be the biggest gaming company in the world. They want it all-- consoles, PC games, you name it-- and connecting with Blizzard helps them get a big part of that. World of Warcraft has turned Blizzard from a quality game designer into a videogame powerhouse, and Activision, in reaching for the top, has invited Blizzard on their team.Blizzard will profit from it as well-- Activision knows how to get games published and marketed (just look at Guitar Hero III, which has done incredibly well for being a game that was not only not made by the original developer, but actually released up against a strong competitor made by the original developer). Blizzard knows how to make great games, and Activision knows how to release them, so both companies obviously think this is the beginning of a beautiful friendship.But is it?
Activision stock way up after merger news
Though some World of Warcraft fans may be in a tizzy over the news that Vivendi and Activision would merge to form Activision Blizzard, it seems that shareholders in the two companies weren't put out in the slightest. GameDaily is reporting that Activision saw a NASDAQ bump of 16 percent ($3.55) in their stock since the news was released, bringing its worth to $25.70. Vivendi got a three percent jump.Not every investor is smiling though. When faced with the news that the company would have a new, super-powerful competitor, EA's stock tumbled 91 cents to $55.29. We're sorry, Electronic Arts, but at least you can take comfort in the fact that (at the moment, at least) your company has the far better name.
The9 buys shares in ... itself
The Escapist reports that following disappointing profits despite record sales, Chinese gaming company The9 (the Chinese carrier of World of Warcraft) saw its stock values plummet by 32% recently. The company then took the opportunity to purchase back $50 million worth of shares in itself.CEO and Chairman Jun Zhu was quoted by The Escapist saying, "We think that the current shares price level do not reflect the company's value and potential. Mirroring this confidence, our board of directors has authorized the company to repurchase up to $50 million of its own stock."This curiously comes after a great deal of growth of the Chinese World of Warcraft player-base in Q3 and the recent launch of Sword of the New World: Granado Espada.
Giant Interactive breaks the fourth wall by issuing virtual stocks
In a strange bit of news from the far east, we've just learned that Giant Interactive, the Chinese game developer/publisher behind Zhengtu Online, will be doling out virtual shares of their stocks that will be redeemable for gold in-game, with the in-game value varying depending on the market value of their real-world stock at any given time. Giant Interactive officially goes public on the NYSE this Wednesday.We're still a bit confused by what they mean by issuing stock. Will shares be available for purchase with in-game gold or is it being handed out for free as some sort of PR stunt? If they're using in-game gold (or even real cash), is this an attempt to gain market capitalization? We know China's laws are bit a different than what we're used to, but is this sort of thing even legal? Does it even matter? It is a mystery!Either way, we'll find out soon enough. They'll be issuing the virtual in-game stocks from November 1 through the end of the year. Happy trading![Via Warcry]
Analyst: 10% of iPhones sold to unlockers
Apple Insider has an analyst saying that 10% of iPhones sold in Apple stores in September were being bought by people who are then turning around and selling them unlocked. That seems like a big number when you picture the situation Gene Munster, the analyst, describes: "one Apple employee acknowledged that customers were buying five iPhones per store visit in order to turn around and resell them unlocked."But is it really that big? 90% of people buying iPhones are sticking with AT&T, so considering that Apple got the support of a network and a slice of the service plan profits, a number like 10% of unlocks actually seems to me like it validates Apple's choice to sell the phone locked. SDKs, jailbreaks, and customer rights (oh my) aside, if only 10% of iPhones out there are unlocked (and the number's probably much lower, as all the iPhones sold before September were probably not unlocked at all), Apple's original decision was justified, in my view.But I'm not defending them for breaking things with 1.1.1. Apple hasn't released the numbers on September sales yet, but 10% of a lot is still a lot, in terms of bricked iPhones because of the unlock crackdown. I haven't heard any tales of folks who paid a lot for an unlocked iPhone and then got a brick with the 1.1.1 update, but I'm sure they're out there and unhappy.
Nintendo shares jump to record high
Wall Street reacted favorably towards the House that Mario Built on Wednesday as Nintendo shares rose to a record high before closing up 2.7 percent at ¥64,800 ($555). The surge in stock price echoed Goldman Sachs' decision to cover Nintendo's stocks; the investment bank offered up a "buy" rating with a target share price of ¥71,000 ($609). In addition, and as if to brag, Nintendo raised its earnings expectations for the second time this business year to ¥370 billion, which amazingly is still well below analyst predictions of ¥415 billion. Nintendo can thank the continuing success of its Wii and Nintendo DS platforms as the drivers behind its most recent success story, while Goldman Sachs lays equal praise at the company's 'talent in creating new markets,' noting that this could bring Nintendo's stock into alignment with that of Apple. Seems reasonable enough to us. Nintendo's product's already look the part, why not go all in?
Investors 'getting carried away' by BioShock buzz says analyst
Following the rise in the Take-Two stock price, Nollenberger Capital Partners analyst Todd Greenwald tells GameDaily BIZ that BioShock is "not the next GTA" and he thinks investors are "getting carried away." Greenwald says he expects BioShock will beat sales expectations (which were originally under 1 million units) and land somewhere in the 1.5 - 2 million range. He says, "However, with the stock up over 20% in the last few days, we have heard of expectations in the 3-4 million unit range, which we believe are unrealistic... keep in mind that Bioshock is only being released on one console platform (Xbox 360), and will likely be limited by its intense, hard-core, first-person-shooter style of game. The game is very dark, very complex, and will have a hard time penetrating the mass market, in our view."But what about Gears of War and its phenomenal success? Greenwald says that was a more "accessible game, had more marketing support, and was released in the holiday window." BioShock sales may come to a screeching halt come Sept. 25 with the release of Halo 3. Most importantly, Greenwald says that he believes the stocks rise can actually be attributed to the expectation that EA (or some other large entity) will acquire Take-Two -- although he doesn't expect it to happen in the next 3-6 months, he also says that management wants to get GTA IV out the door before talking buyout.
Inventec Appliances execs fail to disclose iPod order cuts, could face prison
Earlier this year, Inventec Appliances (spun off from Inventec Electronics) was raided as prosecutors began looking for evidence to support charges of alleged insider trading, and now it looks like nine of the firm's employees could be headed to the slammer. Taiwan's Banciao District Prosecutors Office "alleged that nine executives and one lower level employee failed to publicly reveal a steep drop in iPod orders until after they had sold off nearly $22.4 million worth of stock," and although the employees knew of the order cuts as early as January 19th, nothing was publicly revealed until mid-March. Purportedly, prosecutors "are seeking the stiffest penalties against the two top executives," and if the evidence sticks, we have all ideas that Inventec will be huntin' a new Chairman (and President, too) in the not-too-distant future.[Via TUAW]
iPod iNsider trading?
Nine bigwigs at Taiwan's Inventec Appliances could be headed to jail over allegations of insider trading-- the executives allegedly failed to report lowered order numbers by Apple before dropping off $22.4 million worth of stock on the Taiwan Stock Exchange. Apparently, Apple decided to send more of its iPod order to China, and the executives reportedly knew in mid-January that the decision had been made to do so. But they didn't reveal the troubles until mid-March, at which point IA's stock tumbled, and the execs had already reportedly unloaded their stock.In other executives and stock news, Jobsy picked up a few Apple shares this week-- 120,000 for $5.75 a piece. The stock price has actually been dropping since around August 1st, but considering the price is right around $117 right now, Steve is sitting pretty-- it's good to be the king. Apple says Jobs isn't selling at this time, though. Obviously-- he's got to wait until the ultraportable shows up, right?[via MacBytes]
AAPL earnings buoyed by two days of iPhone sales
According to the Dow Jones Marketwatch, apparently Apple's earnings last quarter are going to be much higher thanks to something called the iPhone. You probably haven't heard much about this device, but our sources tell us it's some sort of hybrid between a Personal Digital Assistant and one of those phones you can use in your car.Investors are cooing about the tiny "iPhone", because even though it only appeared on Apple's quarterly cycle for two days, the estimated 500,000 units sold in the first weekend will probably be listed as at least partly responsible for the 34% rise in AAPL's profits. The iPod didn't do too badly either-- everyone's expecting Apple to announce that around 10 million iPods were sold last quarter also.And not surprisingly, bigger things are on the way-- one analyst says "the iPhone will have an even stronger halo effect than the iPod on Macintosh's market share." If two days of the iPhone can do this much, how big will AAPL get with a whole quarter of the gadget?
Palm posts 43-percent drop in profit
We'll admit, anyone paying even the slightest bit of attention should have seen this coming a mile away, but the latest financial news from Palm is far from peachy. The firm announced a whopping 43-percent dropoff in profits compared to this quarter just one year ago, and the stock subsequently slid four-percent as a result. Of course, the perpetual delays of its modern-day operating system cannot be helping the cause, and considering the innovation that has surfaced in the smartphone arena over the past 12 months, it was only a matter of time before this happened. Interestingly enough, rival RIM was able to find a way to keep on keepin' on all the while, as it simultaneously posted a staggering 76.5-percent increase in revenue from the same quarter a year ago -- talk about salting the wound.
Western Digital buys Komag for $1 billion
Western Digital has bought Komag, a company that supplies its buyer with thin-film media used to create disk drives, for $1 billion. The deal is expected to close in the third quarter of the year, and has been completely approved by both boards, with just regulatory approvals needed to be cleared. The deal is overshadowed somewhat by the statement by one analyst that unusual trading in options ahead of the deal looked "suspicious," which makes it hard for us to recall an example where stock trading in the time immediately surrounding a merger deal wasn't suspicious.
Creative delisting from NASDAQ, cites 'burdensome' regulations
So it looks like we're not the only ones who are sick and tired of filling out forms and sending them in to Uncle Sam, as Singapore-based Creative has announced plans to delist its publicly traded shares from the NASDAQ Global Exchange, citing administrative costs associated with meeting "increasingly burdensome U.S. reporting obligations." The manufacturer of such diverse products as X-Fi sound cards and Live! webcams expects to withdraw its ordinary shares by August 1st and move trading entirely over to the Singapore Exchange Securities Trading Limited, which already sees 90% of the company's average worldwide daily trading volume anyway. As expected, Creative's US shares have already started to tank as investors contemplate the complications of trading in a foreign market, but Creative diehards can probably anticipate a rebound once the integration has been completed. Or so our boiler room broker tells us...[Via epiZENter]
Fujitsu subsidiary dinged for booking fictitious sales
While you may assume that three's company, it looks like Fujitsu Kansai Systems has little choice but to join the dubious trio in yet another round of bookkeeping scandals. Aside from questioning the quality of accounting curriculums in Japan, parent company Fujitsu is being faced with news that one of its subsidiaries allegedly "booked fictitious sales," and while we're sure it wishes the slight dip in stock prices were the only consequence, we're also hearing that "other companies may be involved with the bogus accounting at the software-consulting and sales unit." Of course, spokespersons for the company simply reiterate that investigations are ongoing, but at least one instance of circular sales involving NAJ has reportedly been divulged. So, who's next? [Warning: Read link requires subscription]
Kabu Trader Shun's minigame and big trailer
Half adventure game, half stock trading battles, Kabu Trader Shun hits Japanese stores later this week. Looking to promote its release, Capcom posted a Flash minigame complementing the Phoenix-Wright-styled title. Players can live out the after-hours-lounge experience of a stock trader, text messaging a needy girlfriend while trying to keep the boss' drink filled at the same time. It's a simple, fast-clicking diversion, but seeing the creative steps companies are taking to advertise their games is always interesting.We happened to also spot a lengthy trailer during our stay at Kabu Trader Shun's official site, though we can't guarantee its freshness. Clocking in at just over two-and-a-half minutes, the video introduces the game's characters, trade battles, and adventuring sequences. Head past the post break for the movie.
APPL moves up
Yesterday AAPL continued its upward growth. The stock gained 36 cents to $100.76 according to Forbes. Apple was one of several Internet stocks trading higher yesterday including Real Networks and Amazon.com. So will investors continue to hold onto their AAPL stock or will they cash out for profit? TUAW remains completely agnostic on the matter so we turn this over to you. What are your thoughts, stock-investing readers?
IBM gearing up to lay off over 100000 American employees?
We'll admit, even we're a bit frightened that immensely intelligent humanoid bots may one day oust us from these seats, but according to whispers going around at IBM's HQ, something just as momentous could be going down as early as this year. Shortly after Lenovo told 1,400 of its US-based employees to politely hop off the payroll, IBM's LEAN plan could call for over 100,000 American workers to be canned in favor of (surprise, surprise) hiring overseas. Already, the firm has laid off 1,300 employees in 2007, but according to a recent report, an ongoing "planning meeting" for how to handle the company's Global Services could eventually axe "up to 150,000 US jobs" while hiring cheaper labor in China and India. Interestingly, this news could actually be sweet music to Wall Street, at least in the short term, but we can't imagine how this logistical nightmare will ever bode well for Big Blue's future.
Fred Hickey bet against Apple and lost
Our sister blog BloggingStocks brings us a story about analyst Fred Hickey who recommended shorting Apple Inc back in January. People who took Hickey at his word, when AAPL traded at $85.94, would have had to pay $102.20 to cover the short position, or about a 19% loss. Ouch. So will Apple continue its growth? S&P analyst Scott Kessler thinks APPL shares may rise to $125 over the next year. At yesterday's Financials Q2 2007 conference call, Apple said to expect revenue to dip seasonally during Q3.
Former Apple CFO publicly blames Jobs for stock options scandal
Ouch, El Jobso is not pleased. The tech exec superstar who's largely gotten off clean despite Apple's lingering backdated stock options scandal is now being publicly blamed for wrongdoings by former Apple CFO Fred Anderson, who was dismissed by the company in 2004. According to a statement issued by Mr. Anderson's lawyer via the SEC:"Fred cautioned Mr. Jobs that the Executive Team grant would have to be priced based on the date of the actual Board agreement or there could be an accounting charge. He further advised Mr. Jobs that the Board would have to confirm its prior approval in a legally satisfactory method. He was told by Mr. Jobs that the Board had given its prior approval and the Board would verify it. Fred relied on these statements by Mr. Jobs and from them concluded the grant was being properly handled. ... It now appears the Board may not have given the necessary prior approval to the grants, contrary to what Mr. Anderson understood from Mr. Jobs"This statement was issued after Anderson was ordered by the SEC to return $3.5 million dollars in stock options and also fork over a $150,000 fine for his part in the whole mess. On the flipside, former Apple general counsel Nancy Heinen seems intent on going down with guns blazing: from what we can tell, she has no plans on settling so easily. The SEC charged her for her participating in a scheme that caused Apple to under-report its expenses by almost $40 million, and it looks like she's going to court like the high-powered attorney she is. Things are not looking good Cupertino way -- could this mark the beginning of the end of the Jobs-led Apple corporate structure as we know it? Only time will tell, but we'll keep you updated. [Warning: link requires subscription]
Apple to amend options for employees
The Mercury News reports that Apple is offering to give employees cash instead of previously-granted stock options in order to avoid tax-related penalties for those employees affected by backdated stock options. As you might recall, Apple recently came under a cloud for backdating their stock options to lower their value. At least with cash, employees will be able to record exactly the amount received rather than their perceived worth.
