Board Thread:Game Discussion/@comment-33905330-20190222102100/@comment-35757312-20190222201704

ME7 wrote:

CONSIDER:


 * 2 days after the 3rd quarter report the stock fell to a low of 78 (intraday).
 * 10 days after the same report the stock was back up to 108.8. (intraday)
 * That's a 39.5% rebound in 10 days!!!
 * Just prior to the announcement they were at 92.52 and that's about where they are now after the layoff news dropped.
 * After 2 negative news releases the stock is still okay.

Some are saying it is actually a good buy for 2019 Why 2019 Could Be a Good Year for Electronic Arts Stock. However we will have to see how the layoffs effect things. It's safe to say this is EA's way of trying to corret the Q3 low. The immediate public reaction is negative, usually is.

In the big picture I think EA looks fine, RR3 should be fine (I hope)

However people lost their jobs... that sucks!! I too hope people can find work in their field. I imagine some will have to move to a different nation to do that. Big changes! I am with you on the stock price analysis. It tends to behave that way. Company announces a bad quarter, short term investors/analysts pull back and price goes down. Then it rebounds over time.

The key issue is that EA admitted that they fell short:

"Q3 was a difficult quarter for Electronic Arts and we did not perform to our expectations."

So, they had to show the market corrective measures to address that. That normally means cutting costs which more often than not translates into layoffs. They look at focusing on what is high revenue (cash cows) and strategic (core products, growth engines) for the future. Unfortunately that meant that the products developed by the team in Australia didn't make the cut.

If the layoffs affected 50% of the workforce, as I saw somewhere, it will have some impact on RR3. There is no way around it. We will have to wait and see.

It sucks. Union or not, I hope these employees get treated with respect and find a new job soon.