EA Stock Soars On Microsoft Buyout Rumours

Rumours can be powerful forces in the economy, as evidenced by an 8.1% rise in Electronic Arts stock today following unsubstantiated rumours that Microsoft was interested in buying the publisher out.

What analysts and strategists are calling "unsubstantiated chatter" had a profound effect on EA stock today, rising 8.1% to $US20.01 during Nasdaq trading this afternoon.

"There's talk that Microsoft might be interested in acquiring Electronic Arts. It's unsubstantiated chatter, but it's out there," said Frederic Ruffy, an options strategist at WhatsTrading.com in New York.

And sometimes being out there is more than enough. Microsoft shares also rose during the day, gaining 1.1% to $US26.05, despite analysts claiming that such a move makes no sense whatsoever.

But Trip Chowdhry, an analyst at Global Equities Research, said Electronic Arts was not on Microsoft's "radar screen" based on his industry contacts. "Our contacts just don't see Microsoft buying Electronic Arts, no synergies whatsoever, and also not Microsoft's corporate primary focus right now," Chowdhry wrote in an e-mailed note.

A quick glance about the internet finds that analysts largely agree — this doesn't seem like a likely move. Still, we've reached out to Microsoft and EA alike, and will update the story once we receive any response.

Electronic Arts stock up on takeover talk-traders [Reuters - Thanks David!]


Comments

    If this is true, Sony could be up the proverbial creek without a paddle.

    EA have possibly the biggest range of games on multi-platform, if MS were to buy them that would make them MS first party and all EA games exclusive to MS most probably.

    It has been often said that EA could easily make their own console quite comfortably because of the many many franchises they own.

      Hello, Anti Competitive laws

        what, you think that's stopped Microsoft in the past?

      umm wasnt the 3DO made by EA?

      therefore would fail again.

        I think you're getting confused by the fact the 3DO company was headed by Trip Hawkins, formerly the founder of EA.

    Haha let's hope so

    David or anyone really, would this be possible? I know the US have a lot of stupid (and sometimes understandable) laws in business and copyright and all that crap. I mean you can sue someone for wearing the same thing as you (Cowboy dude from NYC suing M&M's LOL).

    But i mean, i can't give an example cause i forgot what it was over, but i remember some big company buying someone out. Oh yeah thats right, something bout MS buying Yahoo or something and they needed to get it approved by some US court or some crap.

    Point is, whoever approves/disapproves these things - could they say NO to MS trying to do this IF it is true.
    I would care if they did acquire them - they would be even more dirty rich and make a lot of games exclusives/timed exclusives to the 360 and future Xbox brands.

    But why would EA want to sell. I mean they rake in the cash and just because of a financial crisis thats pretty much over, they're gonna start earning more than previous years cause of the decline this year.

    But lets say MS does acquire them. MS would be stupid to make ALL games exclusives even majority. I mean Madden & NBA games wouldn't be exclusives, they sell to well across all consoles.

      Anti Competitive laws.

        Matthew McCay has said (twice now) "Anti Competitive laws".

        I'm sure many of us here realise that such legislation exists, but please let us know how or even if it would be applied in this case.

        EA are not the only big publishing house. Actiblizz, Ubisoft say hello.

        If Microsoft did by EA (not going to happen any time soon) would that leave no competition?
        No.
        Are there any other comparable publishers to EA? Yes.
        Will they still provide games for the Wii, PS3 etc?
        Yes.
        Are those games of camparable quality with similar prospects to EA games?
        Yes

        I don't think it's as cut and dry an issue as you would like it to be Matthew.

    Surely being only able to release games for windows and xbox would make EA less profitable? Part of the reason they make so much money is because they churn out the same crap on many different platforms at once.

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