Skepticism is pretty much the hat we need to don here, as we learn that some analyst believe that EA is perfect for a takeover. The number crunchers over at Cowen Research believe that thanks to the company’s “underperforming” sales in the last quarter EA’s devalued stock is about ready to get gobbled up. In fact they think that EA’s management is not up to snuff at all.
“We believe that following serial earnings disappointments, Electronic Arts now deserves a lower valuation premium than the company has historically enjoyed. Since management first laid out its initial full year 2010 guidance and full year 2011 long-term guidance in February 2008, the company has failed to deliver on its earnings targets and has been forced to repeatedly revise down its guidance. Given this historical record, we do not think investors should place too much faith in management’s current guidance,” the report said.
Now I’m not analyst, but didn’t EA take a bunch of major risks with new IPs that should pay them back down the road? And wasn’t 2008 the year the economy crashed and almost every company failed to meet up to their standards (except Activsion, whore that they are)? I haven’t read the whole report but it seems a bit like they looked at the numbers on the page and not the company itself. However, if their analysis is true then look for Disney or Warner Brotthers, both of whom already have their own game development companies, to be likely buyers.
