Electronic Arts pares gain after report that Amazon not expected to make takeover offer (update)

tupungato

Update 12:08pm: Adds USA Today statement on their earlier story, updates shares.

Electronic Arts (NASDAQ:EA) pared earlier gains Friday, now up 4%, after a report that Amazon isn't expected to make a bid for the videogame maker, disputing earlier unconfirmed speculation.

Amazon isn't expected to make an offer, CNBC's David Faber reported, citing sources. Earlier sources from Swedish video game industry website GLHF said AMZN was expected to make a bid for Electronic Arts (EA) on Friday, according to a report from USA Today's ForTheWin column.

USA Today added an editors note to their earlier Friday item at the top of the story, which had sparked the speculation about a potential tie up between Amazon (NASDAQ:AMZN) and EA.

"Earlier today, GLHF — a gaming/e-sports outlet and content partner of For The Win — ran a version of this story on our website that violated our editorial standards regarding the use of unnamed and unvetted sources. We have updated this story to remove all mention of those sources."

The article said that speculation has been going on for weeks about a possible bid from Apple (AAPL), Disney (DIS) and Amazon.

Electronic Arts (EA) has a market cap of about $35B.

The Electronic Arts (EA) speculation comes after Microsoft agreed to buy EA rival Activision (ATVI) for about $69B, or $95/share in January.

Rival videogame maker Take-Two Interactive (TTWO) rallied 3.5% in premarket trading amid the EA speculation.

In late May, multiple news reports suggest that Electronic Arts (EA) is looking for a deal to merge with an entertainment conglomerate or be taken over by one. The company has reportedly been in talks with companies such as Comcast affiliate NBCUniversal and other major tech companies.

One report claims that a merger deal with NBCUniversal fell through, but EA remains committed to close a sale or takeover and is in discussions with other companies such as Disney (DIS), Apple (AAPL), and Amazon (AMZN).

With assistance from SA editor Jason Aycock.

Comments

[Allen Greathouse]

Two bad investments teaming up?

[CPA Bob]

The false rumor is still worth $6/share.

[Chris Lau]

Keep it simple. Buy $ATVI. Free money before the $MSFT deal closes.

[Neverquit]

I am surprised EA has not been yet acquired by one the FAANG etc. I think it will be acquired soon enough.

EA, offers great margins of profits and adds instantly millions of users, eyeballs 👀, and instant engagement with wide variety of population from young to old.

[Pmg1959]

Acquiring EA would make the Whole Foods deal look like a prize

[esathegreat]

They are a retailer.
Next they will buy Lockheed Martin?

[Neverquit]

@esathegreat That’s short sighted. Amazon is far more than a retailer. You need to do better research.

[Pmg1959]

@Neverquit Retailer + AWS. You could include video games via EA. The new equation would be Retailer + AWS - EA.

[The Clairvoyant]

@esathegreat

They own Twitch… The largest video game streaming platform.

[gordons12]

the reviewers slated battlefield 2042 when it launched, I loved playing the game more than any other. The game has received some good updates, and more is on its way.

[piano-memo]

@gordons12 Battlefield 2042 was the biggest disappointment in the franchise history

[FaultyR0M]

@gordons12 was it the first BF game you have played?

[gordons12]

@FaultyR0M Nope I have played them all. I didnt like there is no campaign, but graphics the game is the best. I dont mind there is no multiplayer, as the game has bots and co op and multiplayer. With the bots game, I get loads of kill streaks.

[Chris Lau]

Buy AMZN in the dip.
Sell EA on this rip.

[The Clairvoyant]

Interesting. Makes sense. That would leave only Take Two as the last independent major game maker. Kind of a shame really.

I guess Activision is far from closed, that one might actually get denied by anti trust since Microsoft has a duopoly in consoles. Either way, the game developers are clearly targets right now.

[jumpnjoey77]

Today's daily rumour - indicative this bear market rally is peaking.

[DividendPrince]

Interesting