William Ackman, Pershing Square Capital Mgmt, and Michael Porter, Harvard Business School professor on strategy, management and fair stock prices
Airtime: Wed. Feb. 9 2011 | 7:00 AM ET
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
"Dollar depreciation leads to higher inflation and ultimately forces foreign creditors to question their rationale and indeed their sanity for continuing purchases of U.S. Treasuries." -Bill Gross
Signs continue that European markets are getting tired. The Spanish and Italian stock markets, big beneficiaries of the sharp decline in their bond yields over the past few months are falling to the lowest since Feb 1. The European bank index is at a 1 1/2 week low after earnings reports from Commerzbank and Credit Ag (RBS bouncing although reporting weaker than expected earnings) were disappointing. This market action is in spite of the German IFO business confidence figure which rose to a 7 month high coming in a touch above expectations and Italian consumer confidence which bounced more than...
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February 20th, 2011 at 10:59 am
One company Ackman should really take a look at is Activision Blizzard (ATVI). I think BR even posted he had a position in ATVI. Well, it has recently been blown out due to their decision to do a share repurchase, pay a dividend, cut production of some games, trim staff, and avoid tablet/smartphone/online gaming rather than reinvest its huge cash flow into developing games for emerging technologies.
The CEO of ATVI is completely out of touch with the direction of the industry and interviews he looks outright confused. Problem is, Bobby Kotick really has control over the firm so I’m not sure what could be done by an activist shareholder.
But check out these interviews:
http://www.youtube.com/watch?v=v5Sw26dIQ3Y&NR=1
http://www.youtube.com/watch?v=BUMiqfcCz24
Do you see that? This is a classic case of a company making money but not having much direction. Kotick is slipping into being comfortable milking what they already have rather than investing into new games and games for the latest technologies. In other interviews he has literally scoffed at the idea of tablet/smartphone games having much of a future.
When asked to “give his shareholders some hope” he cites the billion dollar share repurchase plan and the dividend increase, then gives a smart ass answer that he wouldn’t be making games if he knew what markets would do.
Uh … yeah except for the fact that he’s focusing on NOT making games and is taking the steps that he believes will increase the market price of the stock.
ATVI has a few major cash cows between Call of Duty, Warcraft and Starcraft but the company has completely lost the ability to reinvest shareholder cash appropriately. It is a creative publishing company with a seemingly centralized creative force (Kotick) who has been stamping out creative ideas from the people 20 years his junior who can clearly see the direction of the gaming market has completely changed.
I believe that ATVI is trading at a significant discount compared to its true earning potential. Ackman could make a serious play. Not sure he would be able to really take on Kotick, but I’m sure Ackman would be up for the challenge.