Electronic Arts is going through a critical period after an estimated loss of nearly $ 6 billion in market capitalization. A debacle that results from a drop of more than 15 % of the value of the company's shares, a direct consequence of bad news from the past two days.
Two bad news in the background for EA
This is the cold shower for Electronic Arts with two bad news announced in blow. Everything started from a communication from the company about bad results to come. In question, the poor financial performance of FC 25 and, to a lesser extent, of the last Dragon Age game.
But this revision of the decrease in its annual income forecasts also had a major impact on the confidence of investors who are crumbling while disturbing signals come from several key segments of EA activity. It must be said that EA Sports FC is in a way the golden eggs in the company and seeing the famous football franchise Flancher has something to worry about the markets.
Although an update in January tried to straighten the bar with well -received improvements, the initial sales of the game have been largely impacted.
Consequently, the analyst of Bofa Securities (Bank of America), Omar Dessouky declared the actions of Electronic Arts from the “Buy” notation to “neutral” and reduced the forecast price from 170 to 130 dollars.
The analyst is simply no longer convinced that the company is able to capture enough commitment and spending of players to achieve significant growth in the market in difficulty in video games.
-A dizzying fall on the stock market for EA
According to the analyst, the reasons for this drop in FC 25 revenues remain unclear. But what is certain is that without FC as a growth engine, the analyst has trouble seeing how EA can lastingly generate growth when you know that FC contributes to around 60 % of operating income from EA.
This change in assessment and recommendation for the purchase of Electronic Arts shares had an immediate and major impact on the stock market with a drop of almost 17% of the value of the action. It is simply one of the biggest drops that society has been able to know since it has existed. The course of action has been at its lowest level today for almost two years.
In value, this drop of $ 24 per share represents nearly $ 6 billion in market capitalization loss for EA action. It is also three times the total capitalization of Ubisoft, as much to say that it is a major fact. It remains to know the future, and how EA intends to reconnect with growth by improving the FC formula.
