May 15, 2014, 4:39 PM
- After cutting its Yahoo (YHOO) stake in half to 8M shares in Q4, Dan Loeb's Third Point LLC fully liquidated its position in Q1. (13F).
- Loeb, whose fund once owned 60M Yahoo shares, resigned from the company's board last July as part of a deal to sell back 40M shares to the company. His decision to exit Yahoo comes ahead of Alibaba's much-anticipated IPO.
- Loeb also liquidated the 10M-share BlackBerry (BBRY) position he established in Q4. BBRY -1.6% AH.
- A 4M-share position in Activision (ATVI) and a 1M-share position in NXP (NXPI) were also unloaded. A 2M-share position was taken in Avago (AVGO), as was a 2.55M-share position in Citrix (CTXS) and a 1.6M-share position in Brazilian carrier TIM Participacoes (TSU).
May 6, 2014, 5:38 PM
- Activision (ATVI) has hiked its 2014 revenue guidance by $75M to $4.675B (consensus is at $4.65B), and its EPS guidance by a penny to $1.27 (consensus is already at $1.29).
- Digital channel revenue (68% of total) rose 23% Y/Y in Q1 to $527M; retail channel revenue fell 47% to $172M; distribution revenue rose 43% to $73M.
- Console revenue fell 40% Y/Y to $150M, but PC revenue rose 98% to $239M (strong Diablo III sales). Online revenue (inc. World of Warcraft and Call of Duty Elite) was flat at $227M, and mobile/other revenue fell 47% to $83M (lower Skylanders toy sales?).
- Asia-Pac sales soared 67% Y/Y to $105M, and helped drive the EPS beat. North America -22% to $330M, Europe +6% to $337M.
- The company lost 200K World of Warcraft subs; the base now stands at 7.6M. Diablo III was the top-selling PC title on a dollar basis in North America and Europe. R&D spend +14% to $143M, sales/marketing spend -3% to $104M.
- Shares have pared their gains: ATVI +1.5% AH. Q1 results, PR.
May 6, 2014, 4:10 PM| Comment!
May 5, 2014, 5:35 PM
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May 2, 2014, 1:34 PM
- Joel Greenblatt's screen looks to find stocks with high "earnings yield" - a high ratio of profits to enterprise value. Companies are further screened for a strong return on capital. When a stock scores well with both criteria, it's usually a good company being undervalued by investors.
- For picking individual stocks, there are probably better methods, but as a group, Magic Formula names have vastly outperformed the broad market.
- Although defense names have done well over the past couple of years, the Magic Formula continues to identify Northrop Grumman (NOC +0.2%), General Dynamics (GD +1.4%), and Raytheon (RTN +0.6%) as attractive. Firearm names Smith & Wesson (SWHC +0.8%) and Sturm Ruger (RGR +0.3%) also make the cut.
- A number of videogame makers show up as well: Take-Two (TTWO +0.3%), Activision Blizzard (ATVI +0.2%), GameStop (GME +2.8%), and the struggling recent IPO King Digital (KING -0.3%).
- Not too surprisingly, the Magic Formula also continues to like plenty of big-cap tech names: Cisco (CSCO -0.2%), CA, Inc. (CA -0.5%), Microsoft (MSFT -0.5%), Hewlett-Packard (HPQ -0.5%), and Apple (AAPL +0.1%).
- Hardly market laggards, media names like Time Warner (TWX -0.8%), Viacom (VIA +1.4%), Omnicom Group (OMC), and Starz (STRZA +2.3%) also show up on the list, as do struggling multi-level marketers and for-profit education stocks: HLF, NUS, APOL, ESI, CPLA.
- Punished by investors for not being as hot as they once were, Coach (COH +0.2%), Francesca' Holdings (FRAN +0.1%), and Gap (GPS -1.3%) are Magic Formula picks today.
Apr. 18, 2014, 4:34 AM
- Microsoft (MSFT) has sold over 5M Xbox One computer gaming consoles to retail shops since launching the device in November, well below the more than 7M PlayStation 4 machines that Sony (SNE) has sold since its product was launched last year as well.
- Still, Xbox One sales have outpaced those of its predecessor, the XBox 360, by over 60% at the same point in time since launch.
- The introductions of the Xbox and PlayStation 4 helped boost U.S. sales of consoles in March by 78% on year to $395M.
- However, sales of videogames fell 28% to $432M, with revenue to multiplayer Internet games such as "World of Warcraft" dropping 19% to $84.8M.
- Tickers: EA, ATVI
Apr. 17, 2014, 6:58 PM
- While U.S. physical retail video game sales have been slumping for some time (as shown by NPD's data), SuperData estimates U.S. digital gaming revenue rose 9% Y/Y in March to $936M.
- Revenue for subscription titles such as Activision (ATVI +1.2%) cash cow World of Warcraft fell Y/Y, but download and free-to-play revenue rose. Electronic Arts' (EA -0.1%) much-hyped Titanfall delivered the most digital revenue among "boxed" titles.
- SuperData estimates conversion rates (i.e. the ratio of paying users to total users) for social gaming platforms rose to 2.3% from 1.9% six months earlier. But Zynga (ZNGA +4.4%), which had a Q4 conversion rate of 1.7% and only averages $0.13 per DAU (less than its closest rivals), continues to trail.
- Zynga rallied today after officially launching FarmVille 2: Country Escape (first announced in March) in the App Store and Google Play. Morgan Stanley praised the game's monetization potential last week.
- In spite of widespread concerns about slumping Candy Crush Saga (KING -1.3%) usage, SuperData thinks the game is holding up reasonably well for now. It estimates spending rose 1.2% M/M (3 extra days helped), with mobile MAUs rising 0.3% and social (read: Facebook) MAUs falling 2.1%.
- Other game developers: TTWO, GLUU, KNM, SGAMY
Apr. 4, 2014, 5:23 PM
- Activision's (ATVI) shelf registration paves the way for Vivendi (VIVHY) to halve its remaining stake to 5.8% through a future offering. (S-3)
- At current levels, such a sale would yield Vivendi gross proceeds of $830M. The filing comes 9 months after Vivendi agreed to sell most of a 60% stake in Activision through an $8.2B leveraged recap deal.
- ATVI -0.8% AH
Mar. 13, 2014, 9:28 AM
- BofA/Merrill's Justin Post has upgraded Activision (ATVI) to Buy, and cut archrival Electronic Arts (EA) to Neutral.
- Post sees several catalysts for Activision, including an upcoming Diablo 3 expansion pack, the 2H14 arrival of a World of Warcraft expansion pack and (possibly) a Chinese online version of Call of Duty, and (most notably) the Sep. 9 launch of first-person shooter Destiny, which Activision thinks could be its third billion-dollar franchise.
- His 2015 Activision EPS forecast has been raised to $1.38 from $1.31, and his PT to $25 from $20.
- As for EA, Post sees fewer catalysts following the March 11 Titanfall launch, and "more compelling content" over the next six months from the likes of Activision, Ubisoft, and Sony. Though he thinks EA has strong FY16 (ends March '16) growth potential thanks in part to new Battlefield and Star Wars launches, he doesn't see any titles driving major FY15 upside.
Feb. 7, 2014, 7:15 PM
- More than two decades have passed since Activision (ATVI +14.4%) last traded at current levels, as a Q4 beat, slight dividend hike, World of Warcraft subscriber growth, and game pipeline enthusiasm took precedence over below-consensus 2014 guidance.
- Rivals Electronic Arts (EA +2.8%) and Take-Two (TTWO +2.2%) joined in on the fun. Shares of both companies are roughly $1 removed from their respective 52-week highs.
- BofA/Merrill's Justin Post notes Activision has a history of issuing conservative full-year guidance to start the year, and considers the WoW sub growth a pleasant surprise.
- Wedbush's Michael Pachter is upbeat about a 2014 pipeline that includes updates to WoW and Diablo III, and the launch of anticipated open world first-person shooter Destiny. He thinks the game could produce $500M or more in sales following its September release.
- Activision stated on its CC (transcript) it thinks Destiny could be its third billion-dollar franchise (after Call of Duty and Skylanders), and that it's moving to a 3-year development cycle for Call of Duty titles (three studios take turns launching titles) to allow for better game development.
Feb. 7, 2014, 9:10 AM
Feb. 6, 2014, 4:48 PM
- Activision's (ATVI) guidance is a little soft, but investors don't seem to mind. The game developer expects Q1 revenue of $675M and EPS of $0.09 (below a consensus of $679M and $0.11), and 2014 revenue of $4.6B and EPS of $1.26 (below a consensus of $4.6B and $0.09).
- The company has also announced it's hiking its dividend by a penny to $0.20/share (1.2% yield), and is repaying a $375M term loan.
- Also of note: World of Warcraft subs, declining in recent quarters, managed to rise by 200K in Q4 to 7.8M.
- Console-related sales fell 14% Y/Y in Q4, and made up 64% of revenue. Online subscription sales (9% of revenue, heavily tied to World of Warcraft) fell 27% and made up 9% of revenue; PC sales (5% of revenue) fell 4%, distribution sales (8% of revenue) rose 29%, and all other sales (inc. mobile and toys/accessories) fell 14%.
- North American sales (53% of total) -8% Y/Y, Europe (40% of total) -14%, Asia-Pac (7% of total) -34%.
- R&D spend -11% Y/Y to $197M. Sales/marketing +8% to $239M.
- ATVI +7.1% AH. CC underway. Q4 results, PR.
Feb. 6, 2014, 4:27 PM| Comment!
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Jan. 31, 2014, 4:50 PM
- Less than 18 months after launching The Blast Furnace, the company's first mobile game studio, Activision (ATVI -0.8%) says it's "exploring all our options" regarding the U.K. studio as part of its efforts to align its 2014 resources with "anticipated business requirements."
- The Blast Furnace has been responsible for mobile games Call of Duty: Strike Team and Pitfall!. Compared with Electronic Arts (delivered $124M in mobile revenue last quarter), Activision has maintained a small mobile profile. Activision Publishing chief Eric Hirshberg stated last year he thinks "consoles are still the go-to" for his company.
- More than a few major game developers have struggled to effectively monetize mobile titles in the face of intense competition and fickle consumer tastes. Activision's comments come ahead of its Feb. 6 Q4 report.
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Activision Blizzard Inc is an online, personal computer, video game console, tablet, handheld, and mobile game publisher. It has three operating segments: - Activision Publishing, Inc., Blizzard Entertainment, Inc. and Activision Blizzard Distribution.
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