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Why is this stock value not going up?

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Walley

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Oct 1, 2007
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There was a small section in IBD that wrote about ATVI and how the new game Call Of Duty Modern Warfare 2 was expected to make 1/2 billion in sales this week. I'm a fan of the game and I've also been keeping an eye on ATVI for the last several week to buy on the 9th, the day before the game's release date. So far 1 day after the game's release date the stock was -.70% from my purchase price.

Did I buy too early? Too late? I would think a company that can bring in 1/2 billion in sales in a week will have it's stock price go up.

Any inputs will be appreciated.

Thanks.
 

BurnBright

New Contributor
Oct 8, 2009
102
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Vancouver, Canada
The factors the other posters mentioned could be a reason but also the industry in general is not that hot at the moment (check IBD's industry rank for them). Electronic Arts just anounced they were going to lay off more people and it looks like they also gave a poor outlook. Considering that EA is one of avti's biggest competitors -.9% is not bad. Also looking at the latest news it looks like they did not raise guidance for the year on friday which may of disapointed some holders. Still at about a 18x forward pe and a 1.2 peg its not too expensive but would still need to it game to perform well. I would watch the $10.25 level for support.

Edit* Forget IBD's industry rank as they put AVTI ERTS TTWO in the computer software group not in a video game group.
 

Walley

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Read Millionaire Fastlane
Oct 1, 2007
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Looks like the shares for ATVI kept going up on the 3rd till about the sales date the 10th. I'm assuming that is when the retail stores started buying the units? ...Once the 10th hit it started going back down... meaning the stores stopped for that time?

I'm guessing I should of bought shares of the retail stores like GME gamestop since they were the ones selling. Looks like on the 10th alone the shares went up about $1.

The factors the other posters mentioned could be a reason but also the industry in general is not that hot at the moment (check IBD's industry rank for them). Electronic Arts just anounced they were going to lay off more people and it looks like they also gave a poor outlook. Considering that EA is one of avti's biggest competitors -.9% is not bad. Also looking at the latest news it looks like they did not raise guidance for the year on friday which may of disapointed some holders. Still at about a 18x forward pe and a 1.2 peg its not too expensive but would still need to it game to perform well. I would watch the $10.25 level for support.



Edit* Forget IBD's industry rank as they put AVTI ERTS TTWO in the computer software group not in a video game group.



Where is their industry ranking? Still new with IBD.
 

biophase

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Looks like the shares for ATVI kept going up on the 3rd till about the sales date the 10th. I'm assuming that is when the retail stores started buying the units? ...Once the 10th hit it started going back down... meaning the stores stopped for that time?

Stock prices don't move like this. Everybody knew that COD MW2 was coming out on November 10th about a year ago. The expected sales and all that data has been priced into the stock. So really the $500M in sales wouldn't do anything to the stock because it was expected. Now if they launched and nobody bought COD, then the stock may plummet because that would have been unexpected.

Having said that I'm going to contribute to the $500M by plunking down my $60 at Best Buy for the game tonight. ;)
 

BurnBright

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Oct 8, 2009
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Vancouver, Canada
Where is their industry ranking? Still new with IBD.


IBD on the paid side of their site or in the paper itself ranks the industry of every stock on a A,B,C,D basis as part of their CANSLIM system. I am not sure the exact number but I think they have about 280 different industry groups. I believe it is based on the relative strength of the industry group vs all other industry groups.
 

randallg99

Bronze Contributor
Aug 9, 2007
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one of the most important factors IBD uses to rate stocks with their system is following quarterly growth profits. At this time, not only is ATVI trailing growth at a negative rate, but guidance is also predicting a negative rate going forward. Using the stock screener in IBD is by far one of the best things I have ever used.

IBD is only a few hundred dollars a year but it can save you tens of thousands, if not hundreds, or millions in lost investments in companies like ATVI.

if there's any one thing I can contribute to anyone here regarding investing in stocks, it is this: buy the IBD and read it thoroughly. It really works.
 

Walley

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Oct 1, 2007
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Thanks everyone.

Stock prices don't move like this. Everybody knew that COD MW2 was coming out on November 10th about a year ago. The expected sales and all that data has been priced into the stock. So really the $500M in sales wouldn't do anything to the stock because it was expected. Now if they launched and nobody bought COD, then the stock may plummet because that would have been unexpected.

Having said that I'm going to contribute to the $500M by plunking down my $60 at Best Buy for the game tonight. ;)

So if something is expected and have a date like what's mentioned in this forum everything is already calculated in? How can a share price go up in value just based on expectations?

What if it's something like company "ABC" is making 100k vaccines for swine flu. They don't have an "exact" release date, but within the next few months will be releasing them as the quantity progresses. Will this gradually bump up the share price?

I guess I'm not sure when you said, "Stock prices don't move like this".
 

randallg99

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Aug 9, 2007
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ever hear of "buy the rumor, sell the news?"

the markets are based on human emotions and the gyrations in the markets reflect those emotions. Anxiety can drive a price higher while the reality can bring it back to earth.

Just like the kid who was promised the best present in the world for his birthday only to be disappointed with a scrabble board....
 

biophase

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I guess I'm not sure when you said, "Stock prices don't move like this".

What I meant is that stock prices don't move based on an event such as the date of a new game coming out. If this were true, all toy stores stocks would go up every Christmas and go down after Christmas. Also remember that a company having a hot item doesn't mean that it's profitable.

Stocks do move based on rumors and news, for example if Verizon announced that it is getting the Iphone, there would be buzz and speculation about how many more subscribers they may get. You may see a stock jump on the day or a few days before the announcement. But you will not see a stock jump on the actual day that it begins to sell Iphones.
 

WildFlower

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I don't know... All I know is I have a housefull of teenage boys shouting "GET THE WINDOW! GET THE WINDOW!" ... lots of gunfire sounds and lots of laughter..."THEY'RE COMING! THEY'RE COMING!"...."WOAH!" ... with them on a rush after beating.. level whatever on the sleeper hit bonus Nazi Zombies which was after COD.. right? I think that's the game... That game was almost more popular than the game it came with.

They also dressed in their full airsoft gear to go purchase the game at the midnight release. They looked like they are ready to step off to battle. My son won a T-Shirt and a poster at the release party. My little one wanted to dress like a Zombie for Halloween...

So... I would say that game has greatly influenced my household living. :)

They should make the spin off of the Zombie game because of it's sleeper success.
 

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