Michael Pachter: EA’s indifference is making investors leave
More bad news for Electronic Arts as investors are beginning to abandon the publisher despite its strengths and potential to improve. Industry analyst Michael Pachter explains that EA management has shown indifference in handling their current situation.
After EA’s disappointing quarterly report, followed by a drop in video game shares last week, investors are now abandoning the publisher, mainly because EA management has shown indifference in handling their predicament.
Despite having similar problems, Activision has made steps to ensure investors of their company’s strength and growth. EA, on the other hand, has remained aloof on the matter.
Industry analyst Michael Pachter writes,
The reason for the disparity in valuation is simple: investors believe that [Activision] has “good” management, given that the company has consistently beat expectations and raised guidance, while being incredibly investor friendly; in contrast, investors appear to believe that EA has “bad” management, given that the company has consistently missed expectations and lowered guidance, while projecting an appearance of smugness bordering on hostility to investors.
Pachter has pointed out before that EA is very much capable of turning things around. Pachter still maintains that EA remains strong and is on a road to improvement, although, their only shortcoming would be in ignoring investor concerns. This is even complicated further by the fact that investors are no longer showing confidence that EA can indeed turn things around. EA has dropped 18% in shares since Thursday.
EA has yet to make a statement on the matter, but it appears that they have to take action – and fast.
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Via Games Industry
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