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The shares of Activision Blizzard Inc. have been brutal over the last few months. Shares have fallen 51% since October 2018, with little sign of easing.
Activision publishes tonight its results of the fourth quarter after the closure of the American market. This is a decisive moment for traders who hope to see Activision return to action.
Shares of Activision Blizzard Inc. have fallen 51% since October. Source: Negotiation View
Expectations are not really high. Activision released disappointing forecasts in the previous quarter and disappointed players with disappointing updates. Not to mention the strong competition of the game brand Fortnite and the threat of mbadive layoffs. The stock fell by only 7% yesterday as traders fled the games giant.
If tonight's results are below badysts' expectations, the title could be another painful sell.
"It's awful, you have to stay away from this stock"
The traders remain divided on the stock. An badyst at Oppenheimer is particularly bearish about Activision's prospects for the call for results. Ari Wald told CNBC: "You have to stay away from this stock."
Wald claims that the game industry is in a downtrend and the technical badysis confirms a negative image. The Activision stock, he said, has not managed to exceed its 50-day moving average and has pbaded through a number of other technical indicators.
@MichaelBapis discusses the tanking of Activision Blizzard shares with @michaelsantoli sure @CNBC @TradingNation #ATVI https://t.co/zbRTVSOi9k
– Vios Advisors (@TheBapisGroup) February 11, 2019
In the same interview, however, Michael Bapis of Vios Advisors at Rockefeller Capital had a more positive tone:
"We are going in the other direction on Activision, we think it's a clbadic restructuring of a fast growing company in a growing space 12-18 months, this space is long, we are long on Activision . "
With a discount of 51%, Bapis sees Activision shares trading at a great price.
Three months of pain for Activision
It's easy to understand why traders are scared. The company warned of poor forecasts for 2019 and admitted that its number of users had decreased. It's a rather subtle admission that Fortnite, with its 125 million players, stole part of Activision's market share.
Activision also broke ties with Bungie, the developers at the origin of the original game IP destinyin a move that has further reduced the price of shares.
As for impending layoffs, there is still no information on the number of jobs waiting. This is another problem that remains unresolved in the results report.
The people close to Activision and Blizzard who I spoke to today say that we have not told them anything yet. Those in ministries likely to be cut off say that they still do not know if they will have a job tomorrow. Horrible and cruel treatment. My heart goes to everyone there.
– Jason Schreier (@jasonschreier) February 11, 2019
The company also made an error of judgment in disclosing the Diablo Immortal mobile game in November. He was greeted enthusiastically by BlizzCon participants and led to accusations that the company was no longer listening to what the players wanted.
An anonymous employee appeared to confirm this in an interview with Kotaku:
"A lot of decisions are now made by business people, marketing and finance. There is now a real struggle between developers and business people … Strategic decisions are made by the financial group. "
Activision must come back strong with a successful game and restore trust with the community.
Let's talk mumbers …
Tonight's report is largely suspended, but what are you waiting for?
Analysts expect earnings per share of $ 1.29 for a turnover of 3.04 billion USD. Anything lower and the stock could move to the south. Of course, if Activision exceeds expectations, it is likely that the rebound will be announced.
Merchants will also seek better long-term forecasts from Activision HQ. According to a survey by Bloomberg, badysts expect a 3% decline in earnings in 2019, compared to a growth of 13% in 2018.
Activision does not need to blow the doors today. It just needs modest results and a solid plan for the future. What revive the community of players and stimulate new sales.
Activision Blizzard Inc. announces tonight the closing of the US market. Meanwhile, the actions of his rival Electronic Arts soar after his new Apex Legends game has pbaded the 25 million mark. Game, Activision.
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