Buying Activision On EA's Miss

Electronic Arts, long considered the king of video game publishing, reported earnings Thursday that met estimates to the penny. However, EA's guidance was less than stellar, and as I write this (3:20pm, Halloween Friday) the stock is getting punished to the tune of -17%. Where it will close is anyone's guess in this volatility. But the bigger question for video game investors is this: Should we be worried about the video game industry, or just about EA in particular?

There is plenty to worry about in consumer-land, but as I've written in the past, a growing video game cycle can cause gaming stocks to overcome a recession. Here's a chart showing how ATVI, ERTS, and THQ (THQI) held up from 2000-2004 while the S&P 500 lost ground.

Why I bought Activision after Electronic Arts disappointed the street.

by Randal LaBine | 11/03/08 | Stocks: ATVI, ERTS, THQI,

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DJIA	10,039.44	131.05	1.32%
NASDAQ	2,146.01	19.96	0.94%
S&P 500	1,068.95	12.21	1.16%


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Buying Activision On EA's Miss

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