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Varchild2008 (84.36)

S&P's ATVI move jumps on Varchild "The Moron's" Bandwagon

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June 16, 2009 – Comments (7) | RELATED TICKERS: ATVI

Just have to *gloat.*  Around 3:50p.m.  Standard And Poors came out and Downgraded ATVI to a HOLD as well....

So.. They jump on board the Varchild "The Moron's" Bandwagon as I downgraded the thing several hours before they did.  I was FIRST!

And unfortunately some people are misinterpreting both MY downgrade of ATVI as well as S&Ps.

If my downgrade was equivalent to "SELL!!!" .... or if S&P's downgrade was equivalent to a 'SELL' or call to 'Short' the stock... Then why is it that neither of us claimed that the Share Price Target of $14.00 should be lowered?   Why?

With S&P's report... You have to realize that they are just being Cautious not wanting to see a Stock escalate way out of hand....

I eyeballed the RSI value as the share price jumped to $13.00 intra-day.  That RSI was screaming "Overbought."   ATVI was due for a pullback...  Without some kind of pullback on a stock in a sector that is showing weakness year over year then you have a real momentum problem with the stock.

Lots of stocks get ahead of themselves from time to time.. It's natural... It's normal.... But, I will always call out anytime someone sends one of my stocks to a level.. to a price... that disgusts me.

I don't want to pay $13.00 for ATVI..... Now today... Not after April and May's video games sales slump and the Shelves jam packed full of Unsold Video Games collecting Dust on Best Buy store shelves... There's nothing here that screams BUY at $13.00+.  At least not yet!

Sure.. Starcraft and Diablo is coming... Diablo won't be around in 2009.. That's in 2010... That's so far away it really can't be priced into the stock yet...cause it shouldn't be...

What investors should be pricing in is Q3 and Q4 sales expectations.... With the cautious caveat of how sales are doing in recent past months.  It's tough to price up a stock to reflect ATVI's insanely awesome lineup when the sector is looking weak..

I bought Prototype... I Pre-Ordered the video game.... I bought XMEN Origins on a Pre-Order...

But.. I don't see all that many people buying these 2 titles..  I also am cautious over the fact we haven't yet gotten the press release on how well or not well the "MAP 2" for Call of Duty World at War is doing...

We got a Press Release the very MONDAY after MAP 1 released telling us about 1 million downloads in a single weekend.  It's Tuesday....It's after the closing bell.... Silence from ATVI....

Just hate to see investors get burned thinking to dip into the stock at $13.00.... ATVI gets a Road Bump, Earnings Miss in Q2... Stock Price dips to $11.00.. And the investor that bought at $13.00 dumps his/her shares thinking all is lost...

Better to make sure we don't see $13.00 until ATVI shows us the money? no?

Let's either wait for a better handle on things via a Press Release on that MAP 2 from Call of Duty before thinking $13.00 is fair value.

X-Men Origins what.... They sell just over 52,000 copies? In May?  I mean... and No one thinks that's a bad thing?   Sorry.. But those numbers don't add up when you got a Blockbuster Film that coincides with the game... I *FEAR* a Drop Off in X-MEN Origins will occur in JUNE..and JULY...and AUGUST....and OMG...maybe even all Christmas Long?  That title can't justify a $13.00 price and Starcraft + Diablo ARE NOT OUT YET!

7 Comments – Post Your Own

#1) On June 16, 2009 at 6:34 PM, dlwaz (< 20) wrote:

Numbers don't mean much unless you consider the big picture.

Blizzard took 7 of the top 20 PC game sales in May, according to NPD Group.  Disregard Starcraft 2 and Diablo 3, which will almost certainly be immediate bestsellers on a global scale.

ATVI has 3 of the top 10 selling games for 360, PS3, and PS2 for May.  That is 3 each, including X-Men Origins: Wolverine at #2, #3, and #1 in the rankings, respectively.  Prototype is the current top selling game on Steam (PC) this week, and was #2 (360) and #6 (PS3) in debut for UK releases last week, beaten only by Sims 3.   I think we'll see in a few days how it sold, but I am far more optimistic than you.  

Activision's Modern Warfare 2 is predicted to be the largest release this year.  Rumors of conjoint studies describing MMO-type possibilities and/or pay services for the franchise are all over.  CoD:WaW has sold over 11 million copies and new content and discounts will drive more sales.  I believe there was a sales spike last week, though no official word yet.  

New movie tie-ins are coming.  Blur is coming.  Tony Hawk Ride is coming.  DJ Hero is coming.  Guitar Hero 5, hopefully a more robust DLC system for the rhythm games.  I don't know enough about these to comment yet, but from what we've seen and heard at E3, there are many, many positives.  I think your anecdotal evidence needs a bit more substance, and I hope ATVI does drop a couple of bucks, so I can get more on the cheap.      

     

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#2) On June 16, 2009 at 7:15 PM, mode7 (87.72) wrote:

Yeah, I have a lot of ATVI and if it does decline below $10, I think I'll just buy more.

I guess the simplest way for me to put it is, Blizzard knows how to make good games.

I usually pay little attention to the rating agencies, unless they're just absolutely screaming sell across the board. For me the positive ratings for ATVI by different agencies were just one more reason to buy. 

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#3) On June 16, 2009 at 9:17 PM, Varchild2008 (84.36) wrote:

As long as people don't misinterpret me as being Bearish in ATVI I'm ok.. I got my point across...

I'm just... *neutral* right now in a share price of $13.00+. 

I'm happy and thrilled to buy ATVI at $11.99 and I hope it does DIP to that level before proceeding on it's upward momentum.

I am certainly hoping for it.. Might not dip that far... Today's action shows lots of support for a $12 handle....  But, there's plenty of FEAR in the markets right now....

And... While it is nice to see ATVI constantly scoring big on NPD Group rankings... You also have to be extremely concerned about the value decline in NPD rankings.  I mean to say that Year over Year declines mean that #1 this year isn't selling like #1 last year.

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#4) On June 16, 2009 at 10:59 PM, dlwaz (< 20) wrote:

Understood, but you have to consider that this is a temporary setback.  The gaming industry is expanding year after year, and it's only going to get bigger.   I believe the recent report on Gamasutra have this industry hitting $20+ billion by 2013, and I look at ATVI as a pivotal part of that, due to brands alone.  If you want immediate results, certainly you can do better in other industries, but do you really think ATVI is not going to go up in the long run?  

Weak numbers are understandable, but top brands remain consistent, and that's the argument I am trying to make.  If Prototype, for example, does as well as I think it will do, I would expect a new franchise there.  A CoD MMO of some type, if done well, will break the bank.  Everyone knows Blizzard does their part, but now I see a new peripheral for Tony Hawk that people are raving about at E3.  ATVI is slowly becoming a powerhouse in this industry, and I consider this the ground floor.  

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#5) On June 17, 2009 at 5:23 AM, checklist34 (99.79) wrote:

starcraft 2 will be > all.  I think Korea put starcraft on like cereal boxes when the first one was out.  its fun!

I am not long ATVI as its just not that cheap.

I have nothing intelligent to add about ATVI other than to observe that its basically formed in steel that Starcraft 2 and the new Diablo will be world-wide epic-scale hits.  They will, there are millions upon 10s of millions of people waiting for starcraft 2, all blizzard has to do is not screw it up, and from the previews they haven't, it looks perfect.  I want to play.  I want the Protoss to win, they are cool.

Varchild, you are gravitating towards reminding me of Alstry in a very different way. 

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#6) On June 17, 2009 at 4:25 PM, Varchild2008 (84.36) wrote:

I go into mood swings though.... Sometimes super bullish... sometimes super bearish!

Ultimately, I am right that $13.00 is overkill for ATVI for now...
The market today didn't want to touch it.

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#7) On June 17, 2009 at 4:37 PM, dividendhound (< 20) wrote:

Hah, the protoss were pretty cool...but I usually enjoyed the Zerg and Humans the best.  Those battletanks were nice.  I think the biggest risk with SC2 is simply that they end up delaying it month after month to get it right - it's something that ATVI does that some of the other game companies don't get. 

 I am not a huge fan of ATVI jumping on the make-games-that-track-movies bandwagon.  The games are usually not that great for a number of reasons, and I think it dilutes the brand. 

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