Good timing to literally own a piece of Blizzard and to see your earnings sky-rocket. According to iStockAnalyst, Activision Blizzard has put their stock open for investors—if I understood it correctly.
Nevertheless, with the recent news that NetEase acquired the license to operate World of Warcraft in China as of late June, and that Chinese Ministry of Culture set new legislation to request new permissions for foreign game developers who change operator, there is a potential issue if a negotiation with the Ministry of Culture fails by then.
I am no financial analyst, but there is some incoming potential loss post-June. World of Warcraft’s approval to operate in China will be automatically revoked by the Ministry of Culture on June, once The9’s license ends. NetEase would have to submit three applications to the Chinese Ministry of Culture requesting a review process for ... World of Warcraft (vanilla) and two separate ones for Burning Crusade and Wrath of the Lich King. That sounds like ... a helluva long process to get the game back online in China after June. I see that as a good sign to sell stock, before the Titanic hits the ... Chinese iceberg.
Goldman Sachs (GS) upgraded Activision Blizzard (NASDAQ:ATVI) to “Buy” from “Neutral” and adds the stock to their “Conviction Buy” list with a $14 tgt.
Firm believes the timing and magnitude of earnings catalysts in the form of game sales and active share repurchases should restart the trend of positive EPS revisions and improve sentiment on the stock while overhangs fade in importance.
In a new detailed analysis, they find ATVI shares over-discount music genre fatigue and the Warcraft transition. Goldman sees Warcraft and other IP offering improved visibility into their c. 2%/8% revised, above consensus 2009/2010 EPS and sustainable earnings as a key driver of stock appreciation through 2H’09
