The mobile gaming sector is drawing quite a bit of interest from investors this week. Not only are two big earnings releases on their way, but we also have a mid-sized acquisition drawing interest as well. Today, we’ll take a look at three gaming stocks that are worth watching as the week unfolds.
Activision Blizzard Will Acquire King Digital Entertainment
Activision Blizzard recently announced that it will be acquiring King Digital Entertainment. The acqusition will meld two strong gaming companies together which is likely to prove to be a strong move for ATVI. Under the acquisition agreement, ATVI will acquire all outstanding shares of KING at $18.00 per share, bringing the value of the deal to $5.9 billion and signifying a premium of 26%. In a statement, Bobby Kotick, CEO of Activision Blizzard had the following to say:
“The combined revenues and profits solidify our position as the largest, most profitable standalone company in interactive entertainment. With a combined global network of more than half a billion monthly active users, our potential to reach audiences around the world on the device of their choosing enables us to deliver great games to even bigger audiences than ever before.”
As a result of the acquisition news KING is trading up in a massive way; Unfortunately, ATVI isn’t sharing the same fate. Nonetheless, this is likely to prove to be an overwhelmingly positive move for ATVI in the long run.
Glu Mobile Releases Earnings Thursday
Glu Mobile Inc. (NASDAQ: GLUU)
Glu Mobile is expected to release its earnings report on Thursday. If this quarter’s report is anything like the last quarter, we can expect to see the earnings work as a catalyst in favor of GLUU. On August 4th, Glu Mobile reported earnings at $0.01 per share, beating expectations of a loss of $0.04. In the quarter, the mobile gaming company also beat revenue expectations by just under $5 million. Looking at the pre-earnings activity in the market on the stock, it seems as though investors are expecting another great report. So, now may be the time to start watching GLUU very closely.
Zynga Is Set To Release Earnings This Week As Well
Zynga Inc (NASDAQ: ZNGA)
Finally, Zynga will report earnings today after the closing bell. This is another report that investors are eagerly anticipating. That’s because ZNGA has a strong history of producing positive earnings surprises. In fact, over the past four earnings report, the company has averaged an earnings surprise of 15.48%, with the last report producing a surprise of 33.3%. In the quarter, the company is expecting to produce revenues of between $175 million and $190 million with earnings coming in around $0.01 to $0.02 per share. However, this is a company that has historically outperformed guidance. When the report is released, we can expect to see great things. So, get ready for a nice opportunity after the closing bell today.
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