Please ensure Javascript is enabled for purposes of website accessibility

Why Electronic Arts' Shares Popped 13% Today

By Travis Hoium – Updated Apr 15, 2019 at 11:30AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

EA may finally have a competitor to "Fortnite."

What happened 

Shares of video game maker Electronic Arts (EA -1.50%) jumped as much as 12.9% after the company announced strong engagement for the recently released Apex Legends. At 11:30 a.m. EST, shares were near their high for the day, trading up 12.8%. 

So what

Management announced that battle royale game Apex Legends drew 10 million players in its first 72 hours. That's an incredibly fast pace of adoption and may finally eat into Fortnite's domination of the battle royale market.

Man playing video game on computer.

Image source: Getty Images.

The move comes only a day after EA and other video game stocks dropped due to weak fourth-quarter results and 2019 guidance. The tepid guidance was largely due to Fortnite taking market share, so this may be a sign the company will take some share back. 

Check out the latest earnings call transcript for Electronic Arts.

Now what

Three days doesn't make a new game a success, but investors are hoping it'll stem some of the market share losses to Fortnite over the past year. Every major game developer is trying to copy the battle royale concept, and early indications are that EA may have a hit on its hands. I wouldn't go all in on results this early, but over the next few quarters, we should see Apex Legends be a meaningful part of the company's results. 

Travis Hoium has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tencent Holdings. The Motley Fool recommends Electronic Arts. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Electronic Arts Inc. Stock Quote
Electronic Arts Inc.
EA
$115.71 (-1.50%) $-1.76
Tencent Holdings Limited Stock Quote
Tencent Holdings Limited
TCEHY
$33.82 (-1.31%) $0.45

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
326%
 
S&P 500 Returns
102%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.