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Activision Blizzard, Inc (ATVI)

  • Nov. 15, 2013, 2:20 PM
    • After rising 52% Y/Y in September on the back of huge sales for Take-Two's (TTWO -0.2%) Grand Theft Auto V, NPD estimates U.S. physical retail video game sales only rose 12% Y/Y in October ahead of this month's PlayStation 4 (launching today) and Xbox One (launching on Nov. 22) debuts. GTA V was once more the bestselling title.
    • GameStop (GME -2.2%) is selling off on the wake of NPD's numbers, and so is Electronic Arts (EA -5.7%). Investors in the latter might not be pleased Madden NFL 25 (#2 in September and #1 in August) and FIFA 14 (#5 in September) fell out of the NPD's list of the ten top-selling games. EA's Battlefield 4, which launched near the end of the month to muted reviews, came in at #4.
    • Take-Two's NBA 2K14 (#3 in September) and WWE 2K14 respectively came in at #7 and #10.
    • Activision's (ATVI - unchanged) Skylanders: Swap Force was #8 on the list. Diablo III, which was #4 in September, dropped out of the top-10.
    • Hardware sales fell 8% ahead of the PS4/Xbox One launches, and only totaled $171.7M. Accessories sales rose 1%.
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  • Nov. 14, 2013, 5:04 PM
    • Three months after announcing a deal to sell back 40M shares to Yahoo (YHOO) and thereby bring its total stake in the company down to 20M, Dan Loeb's Third Point LLC discloses it owned 16M Yahoo shares at the end of Q3. That translates into a 1.6% stake in the company whose shares have soared over the last 12 months thanks to Alibaba IPO hopes. (13F)
    • Third Point's Nokia (NOK) stake only amounted to 2M shares (current value of $15.8M) at quarter's end. Nokia rallied on Oct. 22 after Loeb disclosed he had taken a position, and provided his reasons.
    • The firm's position in Tibco (TIBX) was pared to 4.425M shares (2.7% stake) from a prior 5M. There's ongoing speculation Loeb will make Tibco an activist target.
    • A new 2.6M-share position was taken in Activision (ATVI), which just finished a massive leveraged recap deal with Vivendi.
  • Nov. 6, 2013, 4:11 PM
    • Activision Blizzard (ATVI): Q3 EPS of $0.08 beats by $0.05.
    • Revenue of $657M (-13% Y/Y) beats by $67.6M.
    • Expects Q4 revenue of $2.22B and EPS of $0.72, below a consensus of $2.29B and $0.79.
    • Shares +1.5% AH. (PR)
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  • Nov. 6, 2013, 3:35 PM
    • Ahead of this afternoon's Q3 report, Activision (ATVI +0.2%) discloses it has sold $1B worth of copies of Call of Duty: Ghosts "into retail stores," and that "millions of people" are playing the game online. (PR)
    • Last year, Activision announced sales of Call of Duty: Black Ops II topped $1B within 15 days. But in that instance, the company was measuring sell-through to users rather than retail sell-in.
    • Strong sales were expected for Ghosts, which has received good-but-not-great reviews. Activision monetizes the Call of Duty franchise both through game sales and subscriptions to online services.
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  • Nov. 6, 2013, 12:10 AM
  • Nov. 5, 2013, 5:35 PM
  • Oct. 21, 2013, 10:04 AM
    • SolarCity (SCTY +7.3%) has been started at Buy by BofA/Merrill.
    • Salesforce (CRM +2.1%) has been upgraded to Strong Buy by Raymond James.
    • Activision (ATVI +1%) has been started at Overweight by Barclays.
    • MA-Com (MTSI +2.7%) has been upgraded to Overweight by Stephens.
    • Russian carriers VimpelCom (VIP -0.5%) and MTS (MBT -1.8%) have been cut to Hold by Deutsche, and so has Aixtron (AIXG +3.2%)
    • NII Holdings (NIHD -4.3%) has been cut to Underperform by Credit Suisse.
    • Celestica (CLS -1.4%) has been cut to Hold by Canaccord.
    • Aruba (ARUN +1.7%) has been started at Outperform by Northland.
    • Applied Optoelectronics (AAOI +10.9%) has been started at Strong Buy by Raymond James.
    • Xoom (XOOM +6.9%) has been started at Buy by SunTrust.
    • Montage (MONT -0.4%) has been assigned five bullish ratings, and no neutral/bearish ones, on underwriter coverage day.
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  • Oct. 18, 2013, 11:15 AM
    • Thanks to Grand Theft Auto V's (TTWO -0.6%) blockbuster launch, U.S. retail physical video game sales rose 52% Y/Y in September to $754M, per NPD (or +40% if one includes PC game sales). Sales were up 21% in August after falling 19% in July.
    • GTA V, whose global retail sales topped $1B within three days of its Sep. 17 launch, single-handedly accounted for over half of NPD's September figure. Electronic Arts' (EA +0.6%) Madden NFL 25 was #2 on NPD's bestseller list after coming in first in August, and FIFA 14 was #5. Take-Two's NBA 2K14 was #3, and Activision's (ATVI -1.1%) Diablo III was #4.
    • Hardware sales -13% Y/Y to just $183M ahead of the Xbox One/PS4 launches. Accessories +2% to $142M. GameStop (GME +1.5%) is higher after initially trading near breakeven.
    • NPD also reports U.S. digital game revenue rose 6% Y/Y to $970M, albeit with a mix shift away from traditional fare. Downloadable content sales for console-type games fell 23% to $198M, and subscription MMOs (such as Activision's World of Warcraft) lost 300K subs.
    • However, mobile game sales rose 14% to $266M, social games rose 16% to $176M, and free-to-play MMOs such as EA's Star Wars: The Old Republic added 700K users. That first two figures spell bigger addressable markets for Zynga (ZNGA +1.8%) and Glu (GLUU +4.1%), respectively; each has lost some share this year.
  • Oct. 11, 2013, 4:33 PM
    • A day after Delaware's Supreme Court cleared the way for the deals to proceed, Activision (ATVI +0.2%) says it has closed its $5.83B, $13.60/share leveraged recap deal with Vivendi (VIVHY.PK), and that Vivendi's sale of $2.34B in shares (also at $13.60/share) to an investment group led by Activision's CEO and co-chairman has also been finished. (PR)
    • Not surprisingly, Activision predicts the leveraged recap, which was financed via $4.75B in debt (average interest rate below 5%) and $1.2B in existing cash, will be immediately accretive to EPS.
    • The two deals leave the investment group, which also features private investment firms and Chinese online gaming giant Tencent (TCEHY.PK), with a 24.7% stake in Activision. Vivendi retains a 12% stake.
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  • Oct. 10, 2013, 2:35 PM
    • Delaware's Supreme Court has overturned a September lower court ruling requiring Activision (ATVI +3.8%) to put its $5.8B leveraged recap deal with Vivendi and the $2.3B purchase of Vivendi-owned Activision shares by the company's CEO and co-chairman to a shareholder vote.
    • The deal, which (judging the market's reaction to the initial announcement) would likely have been overwhelmingly approved by shareholders, is now free to move forward without a vote.
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  • Sep. 27, 2013, 10:13 AM
    • China's State Council says gaming consoles, banned since 2000, will be allowed for sale provided they're approved by the Ministry of Culture. The decision opens the door for Microsoft (MSFT +1.1%), Sony (SNE -0.7%), and Nintendo (NTDOY.PK) to begin officially selling their hardware in the Middle Kingdom.
    • Unofficially, the hardware hasn't been hard to find on the black market, with sellers typically hawking modified systems that support pirated games. However, the government's decision should open the door for console makers and game developers (EA, ATVI, TTWO) to formally market their wares, replete with Chinese-language translations.
    • Aside from piracy, China's well-established online gaming scene will serve as a challenge for console makers and game developers. Some of the online gaming firms they'll be competing against: TCEHY.PK, NTES, GA, GAME, PWRD, CYOU.
    • Microsoft just formed a 49:51 console JV with local firm BesTV.
    • Previous: Chinese government reportedly planning to end console ban
  • Sep. 18, 2013, 5:53 PM
    • A Delaware court has halted the closing of Activision's (ATVI) $5.83B leveraged recap deal with Vivendi (VIVHY.PK), as well as the concurrent purchase of $2.34B in Activision shares from Vivendi by Activision's CEO and co-chairman. The injunction can be lifted either by a successful appeal, or a shareholder vote involving Activision investors not named Vivendi.
    • Given Activision shares soared when the deals were announced, one would think shareholders would sign off on them.
    • Activision recently raised $2.5B to help pay for the leveraged recap deal.
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  • Sep. 13, 2013, 12:25 PM
    • NPD estimates U.S. physical retail video game sales rose 21% Y/Y, reversing July's 19% decline as new titles stoked demand ahead of this fall's console refreshes. Games launched in August accounted for over half of all sales, and their high price tags resulted in ASPs rising 25%.
    • GameStop (GME +5%) investors are pleased with the numbers. So are Electronic Arts (EA +2.7%), and Take-Two (TTWO +3%) investors; while still important, NPD's figures matter a little less than they used to for game developers, thanks to a shift towards digital revenue streams.
    • Not surprisingly, hardware sales fell 40% Y/Y (worse than July's 34% drop), as gamers wait for the chance to buy a PS4 or Xbox One. Sales of accessories, including Skylanders (ATVI +0.6%) toys, rose 7% after falling 3% in July. Nintendo's (NTDOY.PK) 3DS was the best-selling console; 6.47M units of the handheld console have been sold in the U.S. in 2013.
    • Though its first-week sales disappointed, EA's Madden NFL 25 was the month's best-selling title. Take-Two's anticipated Grand Theft Auto V launches on Tuesday.
    • Analysts expect GTA V to pull in $1B+ in sales in Take-Two's FY14 (ends March '14). Pac Crest downgraded Take-Two earlier this week, arguing (among other things) the company has an "empty pipeline" and that there's "potential for changes" in Take-Two's relationship with GTA franchise developer Rockstar Games.
    | 1 Comment
  • Sep. 3, 2013, 11:56 AM
    • Activision Blizzard (ATVI +4.7%will offer $1B in 2020 senior secured notes, $1B in 2021 senior unsecured notes, and $0.5B in 2023 senior unsecured notes.
    • Proceeds will be used to help finance Activision's repurchase of 429M shares (38.2% of the company) from Vivendi.
    • Separately, an investor group led by CEO Bobby Kotick and Co-Chairman Brian Kelly plans to purchase 172M shares (15.3%) from Vivendi. The consortium includes Tencent, Fidelity Management, Davis Advisors, and Leonard Green and Partners.
    • Moody's assigned Activision a Ba1 rating and ratings of Ba2 and Ba3 on its debt issuances.
    • Previous: Activision credit facility going live next week; CS cuts estimates
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  • Aug. 28, 2013, 5:30 PM
    • The $2.5B credit facility Activision (ATVI) plans to use to help buy back 429M of its shares from Vivendi will go live on Sep. 4, Reuters reports.
    • Activision plans to repurchase the shares by end of Sep. using $4.75B in debt financing and $1.2B in cash on hand. CEO Bobby Koticks is separately buying 172M shares for $2.34B.
    • Separately, Credit Suisse has cut its 2014 EPS estimate to $1.25 from $1.50, citing a 10-Q disclosure that indicates Activision has changed the status of ~$160M in software development costs from long-term to current.
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  • Aug. 22, 2013, 10:49 AM
    • Game developers Electronic Arts (EA +2.8%), Activision (ATVI +1.4%), and Take-Two (TTWO +2.4%) are all outperforming after GameStop beat Q2 estimates, issued a strong Q3 same-store sales outlook, and made upbeat comments about holiday season demand.
    • EA and Take-Two are both near their 52-week highs.
    • GameStop's numbers come shortly after Microsoft and Sony announced holiday season game lineups for the Xbox One and PlayStation 4, prior to the start of the Gamescom conference. Sony also boasted PS4 pre-orders have topped 1M.
    • EA made several game-related announcements on Tuesday.
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Company Description
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.