Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Activision....Returns! -- Ignore unavailable to you. Want to Upgrade?

To: Colby who wrote (999)	3/23/1998 4:26:00 PM
From: Tom Caruthers	Read Replies (1) \| Respond to of 1992

Colby, Is there some way you can post a summary for the earnings revision? Why do you think that Alex Brown is revising earnings downward? Normally the 4th quarter is strong for ATVI. Normally, there are product returns, but not until the title has run its course. Dark Reign, Hexen II are not likely being returned in bulk given that the expansion pack is coming out for both and there are still promotional rebates out for them. The same thing could be said about Heavy Gear and Zork GI. I wouldn't expect returns to show up until 1st or 2nd quarter, anyway, given that these titles were released in late November/December. There is no way that Quake II is being returned. Nightmware Creatures was a weak title. Now we have follow-on orders for Quake II, OEM agreements for Heavy Gear and Battlezone, shipment of Battlezone, and Pitfall 3D coming out at the end of March. I asked the question previously, "why was ATVI beefing up the 4th quarter?". A case might be made that insiders knew that the 4th quarter was not shaping up well and pushed a lot of releases to the 4th quarter, while also selling stock. This makes some sense. But that was in late January when the stock was at $16.5. The stock now stands at $11 3/8....a 30% decline. Another case could be made that when selling a stock to Wall St., a company likes good year to year comparisons. Insiders also knew that the period right after 3rd quarter earnings tends to be weak for the stock and why not sell now if the stock can be bought cheaper later? This, too, accounts for the beefing up of the 4th quarter and the insider sales as well. Who's right? I'm willing to bet that we are near the bottom now. Maybe one or two more days of weakness. I guess we'll see! Tom

To: Colby who wrote (999)	3/23/1998 7:05:00 PM
From: Tom Caruthers	Read Replies (1) \| Respond to of 1992

Today BT Alex Brown maintained a buy rating for ATVI but cut ATVI's earnings estimate for the 4th quarter from $0.29 EPS to $0.20 and lowered anticipated revenues from $69 million to $53 million citing that potential product sales may be placed into the 1st quarter of the next fiscal year instead of this 4th quarter. He noted that near-term quarterly results may make investors jittery, however, all companies appear to be investing for future growth. I have been arguing this point all along. Why beef up 4th quarter sales when clearly you want to make sure that the next fiscal year looks even better than last year? This earnings revision, IMO, is not a significant reason for the stock to have fallen so much. It is not like ATVI will not make the money. It's just a question of when. Do not panic. This is a great company with a great line-up and great in-house management and production facilities. Of all the companies out there, name a better one that is priced this cheaply. Tom Caruthers