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Electronic Arts: Your Next Move

EA is going to need to up its game on quality control as well, and possibly up its entire value proposition, if it is going to make up for its recent poor performance. In order to do all these things, EA is going to have to make some serious investments, least of all in whose name is on the letterhead.

The company could turn it all around, but will it happen in the short term? No.

Games, especially the sort that EA needs to erase its previous failures, take longer than a few months to develop and market. This means that the company is going to have lower earnings for the next year or so as it makes these investments and sort of hangs tight until revenue from a groundbreaking new franchise starts to roll in.

For my money, I say short it. EA is falling, fast. A long position could be in order down the road, once it sinks to say under $13 a share, but really there are better and more profitable positions for the money.

--Written by Renee Butler in Seattle, WA

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
Renee Butler is a freelance financial journalist based in Seattle. She has written hundreds of articles and blog posts on hedge funds, the financial markets, investing trends and company developments. Her articles have appeared on MSNBC, MarketWatch, the Motley Fool, The Street and Seeking Alpha, among others. Butler is a member of the National Press Club and the Society of Professional Journalists, and holds advanced degrees in business, financial management, psychology and sociology.
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