[IMPORTANT: I forgot to hit the Publish button, so this article was just sitting in my Drafts for two weeks, sorry. Everything in the article is still valid, and ATVI is a FANTASTIC stock. Happy Thanksgiving.]
Over the Summer I invested in Stocks like Google, Activision Blizzard, Netflix, Electronic Arts, and a few more Stocks. All of them were TREMENDOUS successes (especially google gaining $120 within three days of me buying it, and Activision growing $5 in two days from when I bought it). Unfortunately I sold Activision super early and only came out with ~$5 a profit per share (from $24 -$29). The next big mistake I made was buying EA (Electronic Arts). It took me two months to come out with a meager $2 a share profit (albeit on 2500 shares, so not too shabby).
A few days afterwards I was reading up on Blizzard’s forums, and one of their Community Manager’s had said something similar to, “We will be receiving help from another company to make Hearthstone’s Mobile UI better.” Hearthstone is Blizzard’s massively successful 20 million dollars a month (according to this article) multi-platform online card game. Hearthstone single handedly makes up for the revenue Blizzard is losing from World of Warcraft’s (another massively successful Blizzard game with over 6.5 million monthly subscribing members) waning player base.
So, three days before ATVI announced they were buying King, some loose mouthed CM leaked it to anyone who was keen enough to pick up on it. I bought 2000 shares, and lo and behold, Activision announces that it’s buying King. I sold after a nice profit and bought Google.
Anyways, why is Activision such a good stock right now? Well Blizzard makes ~1.2 billion dollars a year, and Activision makes ~3 billion a year. Every year Activision pushes out Call of Duty games, and every year their revenue only goes higher and higher. It’s also the Winter, and ATVI makes up a large portion of the video games that commonly go on sale and are in high demand.
Not only is ATVI heading into its strongest season (as per historical trends), the fact that it bought King shows that it’s attempting to break into the micro transaction pay as you play market that King specializes in. All in all ATVI is a strong buy with a very high price ceiling.