Shares of Activision Blizzard (ATVI) were up more than 7% on Monday on no apparent company specific news. The shares have been under pressure of late along with the broader market, but investors appear to be sensing opportunity for the company due to new state shelter-in-place orders aimed at containing the spread of the COVID-19 coronavirus.
Retailers have been hit hard as consumers have practiced social distancing. That could work to the advantage of Activision Blizzard, which just released Call of Duty: Warzone, a new battle royale game from the popular franchise.
Activision said last week 15 million people played the game within three days of its March 11 release. Assuming they liked it, they should have plenty of time on their hands to continue playing, and to try out other titles from the company, including some of its mobile gaming offerings. Mobile generated about 25% of the company's total revenue last year.
Bears had worried that Warzone's free-to-play offering would cannibalize sales of paid offerings, but an increase in overall game playing could offset any fears of cannibalization.
Even factoring in Monday's rally, shares of Activision Blizzard are still down more than 12% in the last month. The company had a lot on its plate prior to the pandemic, including a failed Warcraft launch, declining in-store video game sales, and the cloud threatening to take a larger share of the overall game market. Activision also recently named a new chief operating officer, tapping Alphabet veteran Daniel Alegre.
The current climate of social distancing is creating potential opportunities for Activision and other "stay-at-home" stocks. Investors on Monday are keeping an open mind on what is overall a down day for markets.