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Activision Blizzard Is Cheaper Now, But Understand This First


  • Activision Blizzard has made some recent moves that deserve consideration.
  • Valuations have improved – but there are still question marks on the horizon.
  • I'm not investing in Activision, but I know many of you remain interested. Therefore, here’s another perspective on the stock.
  • This idea was discussed in more depth with members of my private investing community, iREIT on Alpha. Learn More »

Activision Reveals The All-New Guitar Hero Live Game In New York City

Larry Busacca/Getty Images Entertainment

This article was co-produced with Wolf Report.

On November 20, I published “Activision Blizzard: Is It Time to Get Greedy When Others Are Fearful?

Co-produced with Dividend Sensei, it featured his bullish analysis of the company


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This article was written by

Brad Thomas profile picture

Brad Thomas has over 30 years of real estate investing experience and has acquired, developed, or brokered over $1B in commercial real estate transactions. He has been featured in Barron's, Bloomberg, Fox Business, and many other media outlets. He's the author of four books, including the latest, REITs For Dummies.

Brad, with his team of 10 analysts, runs the investing group iREIT® on Alpha, which covers REITs, BDCs, MLPs, Preferreds, and other income-oriented alternatives. The team of analysts has a combined 100+ years of experience and includes a former hedge fund manager, due diligence officer, portfolio manager, PhD, military veteran, and advisor to a former U.S. President. Learn more

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Author's Note: Brad Thomas is a Wall Street writer, which means he's not always right with his predictions or recommendations. Since that also applies to his grammar, please excuse any typos you may find. Also, this article is free: written and distributed only to assist in research while providing a forum for second-level thinking.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (101)

Nice work Brad. Thank You.
Brad Thomas profile picture
Our iREIT on Alpha members are loving it!!!

Franchise Group: The Safest Dividend Is The One That's Just Been Raised

I played this by selling Feb 60 Puts for north of $5...I'm willing to own it at $55...also willing to let the puts expire and take the quick $5k
Brad Thomas profile picture
Just posted for iREIT members:
The Highest REIT Climbers
ATVI has been my long term holding along with TTWO and EA. ATVI is also in the top 10 holdings of communications spider - XLC. SSGA holds close to 8 million shares. i picked up ATVI for 50$ in 2017...

At 58$ though, i would prefer an alternative - their Japanese competitor - NTDOY - very compelling valuation...Switch is a rage among youngsters - with 12 bn$ in cash and 30% down for the year . ..NTDOY is a strong buy under 60$.

They have huge plans for Metaverse..
@Sleepless@FED NTDOY is interesting. However, there seems to be no option available for it, and the analytical coverage is skimpy. Also, it is not among the holdings of META ETF. Thoughts?
As is the case with most hidden gems in overseas markets. Metaverse is too much of hype. NTDOY has been into video games for decades. They grew from humble beginnings and are slated to perform consistently well.
NTDOY is a buy bcoz of the following -

16 B$ revenue..(2021)
42% gross margin
16% net margin
14% ROE
larger customer base & revenue than ATVI, TTWO & EA
Asian kids play more video games and are a growing population
Pure video gaming play and not into appliances like Sony & others...focus and sticking to the mission statement is important -
I just saw the news that ATVI employees are trying to unionize. This is truly insane if you ask me. I get Starbucks low-skilled workers unionizing, but highly paid game designers is nuts. Are they underpaid? How is unionization going to stop sexual harassments?
@Stu_gutz Well paid has nothing to do with it Activision makes 20x per employee what Starbucks does.
@PbcMaster what I am saying is that professional, highly-skilled employees do not usually unionize.
threeleaves profile picture
@Stu_gutz might have something to do with entertainment industry, for example lots of unionization of writers in TV business.
Thank you for the great article. I’m buying because I expect the growth rate to ramp up on the back of Diablo Immortal. Right now, their pipeline is truly stronger than ever (with D4 and Overwatch 2 in the works) and I think that we see a string of earnings surprises in the coming years.
People need to separate the success of this company from the sexual hareassment mess. The leadership has built a nice company with franchise games and solid ROE. You take out the sexual harassment and I trust in leadership.
Now addressing the harassment, the concern here is talent leaving and attracting top talent. There is going to be no boycott of games, little Timmy doesn’t care about hareassment at activision, he just wants to play COD, Warcraft, and Diablo.
Now the talent thing is going to sting for a short period until this blows over. That’s why the stock absolutely crashed, market has no time for regressing in earnings from the launch delays. However, I think the worst has passed and now it just takes time for it to blow over. I like they they formed an internal committee and I’m very confident they are probably taking hareassment a little too seriously now (which is not a bad thing).
So, buy a market leading video game company at a 17 PE with strong most of franchise games, yeah, sounds like a good deal to me. With the understanding that we may trade sideways for a few months while time passes and Activision gets out of the media headlines.
Long ATVI at $56
@Tdog88 Leadership suck. They have destroyed the Blizzard franchises completely. The company is just COD and Candy Crush now.
@ny44 well they were bought for $70B, so that’s that.
@Tdog88 Hopefully Microsoft does a better job with those franchises.
Not going to invest with the current leadership. It's a nice company but the leadership is not. Let's say it's not healthy and let's leave it at that.
Mozman profile picture
@User 50432366

Who cares if leadership isn’t “nice”. Go orcs!
@Mozman Leadership is the most important thing in a investment. And they lack a lot of good leadership with this company. Good older golden days for this company are over. Perhaps new leadership could fix the mess they made past years.
Mozman profile picture
@User 50432366

I am not familiar with the details of this situation but hyperbole, crying wolf, and witch hunts are rampant lately and opportunists are taking advantage. Doubtless a few, or more than a few unacceptable events occurred with senior leadership being caught off guard but extrapolating this to sweeping embedded misogynistic behavior at all levels of the company is likely unfair and inappropriate. Would be par for the course in today's political environment. As an example one of the complaints is that many of the male workers sit around playing games all day while the women are forced to do the "important" work. For a company that makes computer games (largely played by men), game testing is a critical part of the job. Certainly there are great female WOW players and having them play testing content is essential but their numbers are considerably less than men and so it would follow the qualified female candidates would be less numerous. You need a gamer to do that job right. For the board to back their CEO in the face of so much knee-jerk outside criticism tells me everything I need to know. Sort of like asking Napoleon if Wellington should resign.
Brad Thomas profile picture
Will Omega Healthcare Investors Enter The M&A Game?

Brad Thomas profile picture
A new ⭐ ⭐ ⭐ ⭐ ⭐ review...

steve7074: ★ ★ ★ ★ ★ (I love it)

"Whether you are a seasoned vet or a novice, I really recommend a subscribing to IREIT. Lots of good information, great tools like the Trackers, & good input from experienced pros to help guide you along the way. Good thoughts from the members as well. "

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Happy Holidays!
Why it is up after hour 58 cents?
@sameh145 Because it's down so much relative to the last 30 days or so.
if this was the same market as early 2021 I would say buy ATVI with both hands
but tech is in a bear market and ATVI's prospects are unclear long term. cash cow franchises are great, but when are they going to put that money to work?
Cristi_an profile picture
More pain for ATVI…they have been excluded this year from Game Awards. This company becomes a good PR platform for others…
@Cristi_an omg how will they ever survive?!🤣
Brad Thomas profile picture
My Oh My, A New SAFE Strong Buy

RoseNose profile picture
Hi Brad!
Enjoyed you sharing different view points. Looks to have had a great 2020 and is definitely slowing down. ...Not one for me; so we agree!
Best always, have a great weekend.
My Rose Income Garden portfolio has 88 stocks and is listed under my profile.
Brad Thomas profile picture
@RoseNose Thank you for being a valued member at iREIT on Alpha....Happy Holidays!
@RoseNose way too many stocks to own.
What bothers me about atvi is silence. They have not communicated for a couple of weeks I believe. This lack of communication is partially responsible for poor performance. I think the CEO must be negotiating his exit and that’s why it is all quiet.

I have been averaging down slowly and have short cash puts w dec 17 strikes.
Trade In Mexico profile picture
@Stu_gutz They might also be negotiating a takeover deal:

Mozman profile picture

"What bothers me about atvi is silence. They have not communicated for a couple of weeks I believe."

The best way to deal with a woke attack is to ignore it. Silence doesnt sell headlines. Eventually the spotlight will move on to something else.
Trade In Mexico profile picture
ATVI had a bullish reversal day and closed in the green even as the NASDAQ plunged 300 points. That's a sign it has hit rock bottom levels and it is ready to rebound from DEEPLY oversold levels. ATVI is up even more in after hours trading now.

ATVI has about $13 per share in CASH on the balance sheet and could announce a huge buyback any day now.

Just a few months ago in July, Charlie Gasparino noted that NFLX, GOOGL, AMZN and MSFT could be potential suitors to launch a takeover bid of ATVI and that is when the share price was $91. (link below) So, it would not be surprising if Kotick agrees to a deal now and takes his golden parachute. If you wait to buy ATVI before a potential buyback (Zillow just announced a buyback today and the stock is up 10%) or takeover or the dust to settle, you will be buying it at $80 to $100 per share.


All major companies have had some sexual harassment claims INCLUDING MSFT, (see link below) just not all of them happened in super woke 2021:

@Trade In Mexico Thanks for the info. Very informative.

I'm not too excited about today's bullish reversal as EA and TTWO were both up 2%+. Prior to yesterday, ATVI was trading similar to EA (down about 6% over 5 days). I think there is still more downside for this one.
Brad Thomas profile picture
The Ground Up: NetSTREIT CEO Mark Manheimer

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