Josh Burwick
Long/short equity, growth at reasonable price, tech, Venture capital

Does EA Stand For Errant Assumptions?

Electronic Arts (NASDAQ:EA) has done one thing extremely well over the last five years - over-promise. Even former CEO John Riccitiello's resignation letter included a negative warning with a brief mention that the "quarter will come in at the low end or slightly below previous guidance." Following this earnings miss heading into a console transition without a permanent CEO would cause most rational companies to err on the side of caution; not EA. EA surprised investors by issuing much stronger initial FY'14 guidance vs. analysts' expectations caused by holding operating expenses flat in what is normally a big investment period. EA's stock rallied 25% subsequently to settle at a new 52-week high. At E3, the industry trade

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