Rumor: EA Facing Takeover Bid from Korean Giant

[Me55enger]

Because the ONLY thing that would improve EAs stocks is if the stockholders hear rumour they may be bought out.

 

[Griffolion]

 

[John Funk]

ITT: people that buy every game EA publish saying EA is the worst thing ever.

Pro-tip, guys: EA is as big as they are because people are buying the games they publish and I bet a kidney every single person here jumping on the flame EA bandwagon has a shelf (or digital library) full of little EA logos.

Completely unsubstantiated [...] It's unlikely that Nexon would be able to simply purchase the North American publishing giant in full [...] Seems unlikely

You admit in the article this has no evidence to support it at all, actually saying as much several times, and still report on it?

Here's the next headline: Microsoft and Sony to Make Console Together. Just copy and paste the "While this report does seem completely unsubstantiated," bit a few times to retain your credibility.

It was still a claim made in a major South Korean newspaper that caused EA's share price to jump 6%. Not exactly "Bob's Vidya Blog says that the next Metal Gear Solid will co-star Pikachu," here. Also, please note that the second and third bits you quoted were discussing the difficulties of such an acquisition rather than the lack of evidence; if Nexon did intend to buy EA it would have to do so with a partial acquisition of stock to begin rather than a full purchase.

So no, actually, this was completely newsworthy. Thanks

 

[Eric the Orange]

FINALLY! EA could actually be run by somebody with a Seoul

Snip

Once...
Just ONCE
I'd like you guys to post an article when I'm actually ONLINE.
Or do you not even get-up before 12 o'clock eastern anymore?

you do like your puns to be the first comment don't you.

 

[Grey Day for Elcia]

ITT: people that buy every game EA publish saying EA is the worst thing ever.

Pro-tip, guys: EA is as big as they are because people are buying the games they publish and I bet a kidney every single person here jumping on the flame EA bandwagon has a shelf (or digital library) full of little EA logos.

Completely unsubstantiated [...] It's unlikely that Nexon would be able to simply purchase the North American publishing giant in full [...] Seems unlikely

You admit in the article this has no evidence to support it at all, actually saying as much several times, and still report on it?

Here's the next headline: Microsoft and Sony to Make Console Together. Just copy and paste the "While this report does seem completely unsubstantiated," bit a few times to retain your credibility.

It was still a claim made in a major South Korean newspaper that caused EA's share price to jump 6%. Not exactly "Bob's Vidya Blog says that the next Metal Gear Solid will co-star Pikachu," here. Also, please note that the second and third bits you quoted were discussing the difficulties of such an acquisition rather than the lack of evidence; if Nexon did intend to buy EA it would have to do so with a partial acquisition of stock to begin rather than a full purchase.

So no, actually, this was completely newsworthy. Thanks

Someone saying something in a single newspaper, no matter how difficult the claim would be, is your barometer for how worthy it is for you to reproduce said article? Not my idea of responsible journalism.

 

[John Funk]

ITT: people that buy every game EA publish saying EA is the worst thing ever.

Pro-tip, guys: EA is as big as they are because people are buying the games they publish and I bet a kidney every single person here jumping on the flame EA bandwagon has a shelf (or digital library) full of little EA logos.

Completely unsubstantiated [...] It's unlikely that Nexon would be able to simply purchase the North American publishing giant in full [...] Seems unlikely

You admit in the article this has no evidence to support it at all, actually saying as much several times, and still report on it?

Here's the next headline: Microsoft and Sony to Make Console Together. Just copy and paste the "While this report does seem completely unsubstantiated," bit a few times to retain your credibility.

It was still a claim made in a major South Korean newspaper that caused EA's share price to jump 6%. Not exactly "Bob's Vidya Blog says that the next Metal Gear Solid will co-star Pikachu," here. Also, please note that the second and third bits you quoted were discussing the difficulties of such an acquisition rather than the lack of evidence; if Nexon did intend to buy EA it would have to do so with a partial acquisition of stock to begin rather than a full purchase.

So no, actually, this was completely newsworthy. Thanks

Someone saying something in a single newspaper, no matter how difficult the claim would be, is your barometer for how worthy it is for you to reproduce said article? Not my idea of responsible journalism.

In a single newspaper, believed credible enough by enough people to cause a 6% jump in EA share price? Yes, that's certainly worthy of reporting on.

Note that we never said this was going to happen or that it was a sure thing. We merely reported that this news existed. And we would have been remiss to do otherwise.

 

[grigjd3]

Maybe they'll force the execs at EA to work ungodly hours while denying them overtime and forcing them to push ads for their MMOs in the form of cross-over armors. Then the execs at EA will wither under the corporate culture of Nexon followed by a dismantling of assets and a "restructuring" whereby all the bureaucrats at EA are offered their old jobs at 2/3s of the original salary. Oh wait.

 

[Nazrel]

Yeah... this isn't happening. EA makes money hand over fist. Why would they cash out to someone who can't buy them outright upfront? "Why yes, I would like to give you a cut of all my future profits for 1/4 my current worth!"

That not how things work, EA is a publicly traded company and doesn't have much say in what investors do with their stock, they can either keep it or sell it off to a third party if they think there's more profit to be made from that. (e.g. Share price at the moment is 16$, if they offer 20-25$ per share buyout they might just take them up on the offer)
The party with a majority share of over 50% (or whoever owns the largest percent of stock) has the most say in how the company conducts itself and works in turn.

This is still highly unlikely, but for wholly other reasons. It would be delicious if it did happen though...

That would be a hostile takeover. But it sounds like Nexon wants the EA board of directors to agree to being bought, which is not going to happen. And, still, they could only buy a quarter, probably less since once they start buying in that kind of volume the price would skyrocket, and that's assuming there are enough EA investors willing to sell.

Er you do know EA has been losing hundreds of millions of dollars for all but 1 quarter of the last 2 years.

Citation. Or, here, I'll do it for you [http://www.google.com/finance?q=NASDAQ:EA&fstype=ii]. Looks like net profits in 2011 Q1 and Q2, and, if you look at their yearly data, you can see they've been steadily trending upward since a dip in 2009. I wish I could see full quarterly data for 2010, I bet they had a good quarter or two then.

Further, even if they are generally "losing" money, that doesn't mean much, as the board/CEO is still being given millions of dollars. Also, they have zero debt, which is pretty amazing. And, they seem to be "losing" money by buying properties, thereby increasing their assets, thereby increasing their revenues (you'll notice 2009 has the largest net loss, but the greatest revenues).

That being said, I'd be worried about a company posting 20% net losses for six years straight, but we can see that they aren't. Not only are they averaging around 10% net loss for the last six years, but they're steadily increasing their net income without decreasing revenues; they're spending less and making steady money, so their investments are paying off.

Generally speaking, a business doesn't want excess profits, anyway. Profits get taxed. A business wants to reinvest its revenue into assets and, after profits have been high, spend their "war chest" on acquiring new assets, which will then show a "loss" for a given quarter. Also, executive bonuses.

Regardless, if Nexon buys EA, they'll almost certainly replace the board of directors, and probably the CEO. And, since the board of directors and CEO are the ones who make the decision to sell (unless Nexon gets hostile), they don't have an incentive to do so as long as they, personally, are making money hand over fist (which they are; EA's CEO has been averaging $15.36 million per year for the last six years, and has been CEO for 15 years) OR Nexon is able to make them an amazing deal (which it can't).

I don't completly understand business finances but if you post net losses for 4 years

(http://files.shareholder.com/downloads/ERTS/1826684202x0x481441/B553C9C1-EBFB-4E7F-A05F-26FD9960A910/Electronic_Arts-2011.pdf)(page 27)

and your assets shrink till nothing your screwed right?

Page 27 of the pdf has the changes to the employee stock purchase plan, and page 27 of the report has a half dozen citations. So I have no idea what you're pointing to.

You're assuming, for some reason, that their assets are shrinking to nothing. EA's assets are growing. It's why they're posting losses: they're acquiring assets. If their assets shrunk to nothing, so would their revenue. But they're revenue's holding steady.

You don't record the acquisition of assets as a loss.

You just turn one type of asset (generally money) into others of equal value (Well technically you have to credit and debit both of them but it amounts to the same thing.)

It does not effect the income statement. The income statement is effected ONLY by a loss of assets.

P.S. Revenue is what you have before to take into account expenses.

 

[Aprilgold]

Not likely Koreans. Go back to Starcraft and your crappy MMOs.

Starcraft is made by Blizzard.. And you are basically saying that EA makes great games..

#

Herp derp learn to read. Where did I imply EA makes great games? Oh, nowhere, and you just can't read. Perhaps you need glasses. Or some new eyes. At any rate, I don't care as long as you stick your face somewhere irrelevant to me.

Well the fact that you used Starcraft as a example, which sold hundreds of thousands and was well received by everyone. Yes, you made EA look good and should do what that gentlemen with the arm flail told you to which is GET THE FUCK OUT!

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Now all we have to do is wait, because if this happens, EA will stop being dicks by the simple fact that they have learned what it is to be under greedy dicks.

 

[Croaker42]

Oh no! If that happened EA would lose all their artistic Integrity...

What?

Thank you for making my day.

OT; Meh its not like EA can get any worse.

You haven't played a Nexon game.

Nope.

Of course I try not to play EA games any more either.
At least if they got bought out by someone worse.... I would never have to worry about it as that would push them well past the line of playable.

 

[Vuirneen]

That headline is misleading.

 

[Aprilgold]

Not likely Koreans. Go back to Starcraft and your crappy MMOs.

Starcraft is made by Blizzard.. And you are basically saying that EA makes great games..

#

Herp derp learn to read. Where did I imply EA makes great games? Oh, nowhere, and you just can't read. Perhaps you need glasses. Or some new eyes. At any rate, I don't care as long as you stick your face somewhere irrelevant to me.

Well the fact that you used Starcraft as a example, which sold hundreds of thousands and was well received by everyone. Yes, you made EA look good and should do what that gentlemen with the arm flail told you to which is GET THE FUCK OUT!

----------------------------------------------------------------------------

Now all we have to do is wait, because if this happens, EA will stop being dicks by the simple fact that they have learned what it is to be under greedy dicks.

I mentioned StarCraft because it has a strong fanbase in Korea, and is one of the most popular games there. I said nothing of its reception, nor how good or bad it is.

I said 'crappy mmos' because MapleStory is absolutely appalling.

I didn't mention EA, nor how good/bad they are. I said nothing of my opinion of them. I think you have me confused with someone else.

I'm still not sure you can read. It would appear that you are the one flailing about trying to criticize my statement, primarily by strawmaning. And not even a good strawman at that.

You don't have to mention something for it to not be implied, therefore I am still correct on the basis that you implied that Starcraft was bad, you said nothing about Korea or good games or bad games from there.

Once again, it may have been my mistake, but as far as I can see, your just not willing to admit fault here.

 

[Atmos Duality]

I hope this is just a rumor, Nexon expanding at all would just be horrifying.

They have worse user policy than any company I have seen.

Cash shop items THAT EXPIRE.

Oh I can only hope so.
It would be a fitting end to EA for them to be someone's little F2P-MMO shilling *****.

I just want to see how low they can go before they're undone by their own hubris, and Nexon's takeover blows up in their faces when they realize who it is they just purchased.

EA is a gangrenous limb that needs to be hacked off.

 

[player3141]

That wouldn't make any sense. Nexon makes f2p eastern games, EA makes paid for (for the most part) western games. Nexon also isn't that much bigger than EA is.

 

[DRTJR]

I for one welcome our new South Korean overlords.

 

[weirdee]

You know how they always have that supervillain in the first season of the show be super powerful and menacing, and then the next season you find out there's somebody even more sinister that just worfs the crap out of the first supervillain at the right moment with a machiavellian screwdriver? This is one of those moments.

 

[Sixcess]

You know that predictive text thing that Google does? I typed EA is into Google and the first 4 sentences it offered as ways to complete my search were:

EA is evil
EA is the devil
EA is killing Bioware
EA is killing videogames

At this point EA could get taken over by Osama Bin Laden, Jack the Ripper and Satan and it would probably still be seen as an improvement.