Shares of Electronic Arts
S&P Capital IQ analyst Jim Yin downgraded the stock yesterday. He feels that the stock's been moving sharply higher on buzz for an acquisition that's unlikely to happen.
It's easy to see why a buyout is unlikely. The video game industry is getting crushed. GameStop
Video game hardware and software sales have been falling consistently since 2009. Digital delivery is where the market's at, and the free or nearly free casual gaming options being cranked out by Zynga
EA has bought its way into digital gaming relevance, but is it enough? Its traditional console franchises show no signs of bouncing back. EA's big splash into Activision Blizzard's
EA's one bright spot has been social gaming, but there's a reason why Zynga's trading for a sliver of its IPO price.
Yes, EA is cheap enough to attract buyout interest, but any smart buyer would wait a few quarters to get any gaming company at a lower price.
Last week's chatter didn't make a lot of sense. It's comforting to know that a Wall Street analyst also sees it that way.
Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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