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
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