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Jester Debunker
03/23/15.3:28.PM

News It's now EA.

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Drowsy Jay
12/02/09.12:14.PM

News Subject: Millions of EA/Dice(ERTS) co...

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Perry Rod
11/17/09.3:29.PM

Management What is it about greedy video game pu...

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Perry Rod
10/02/09.2:41.PM

Management Larry Probst, current chairman of Ele...

828

 

Perry Rod
09/23/09.3:19.PM

Analyst Coverage Cowen Calls MSFT/ERTS Rumor “Si...

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Mahyar Hashemi
09/23/09.2:30.PM

Media Coverage Why so many rumors in the video game ...

848

 

Perry Rod
08/11/09.3:16.PM

Management In response to a question at the Paci...

742

 

Mahyar Hashemi
08/30/08.3:55.PM

Analyst Coverage "Shares of New York-based Take-Two ro...

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Electronic Arts Analyst Oversight

 

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John Riccitello
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Electronic Arts Featured Analysis

 

Outrageous: Electronic Arts Inc CEO Riccitello Buys His Own Company and Closes it Down Two Years Later

by Perry Rod, Published: November 17th, 2009 3:33 PM CST

What is it about greedy video game publisher executives?

Just two years ago at Electronic Arts (NASDAQ:ERTS), with only eight months on the job as Chief Executive Officer, John Riccitello announced a buyout of Pandemic and Bioware studios from his former firm Elevation Partners, of which he was one of the founders.  The purchase price looked astronomical for a developer: 840 million.  To put that in perspective, Take Two (TTWO) Interactive, Inc. purchased Bioshock developer Irrational Games for 11 million and Civilization publisher Firaxis for 27 million in 2006.

Today, we are learning that Pandemic Studios, one half of that 840 million dollar acquisition, is being closed down, suggesting that the studio is worthless to EA at this point – only two years following the deal.

According to SEC documents, Mr. Riccitello pocketed up to 4.9 million on that deal, and no doubt helped his fellow co-founders of Elevation Partners walk away making a nice profit on that deal.  EA’s shareholders have been left with the bill - and a stock that has fallen 70% since that deal was completed.

It would be a sad statement for shareholder activism and shareholder rights if Mr. Riccitello were to continue his tenure as CEO of Electronic Arts without a challenge.  If a high profile chief executive essentially buys his own company, a deal like that should be put to the highest of standards.  These results are the lowest of lows.  There has not been a single developer in the video game industry that has been purchased for anywhere near this deal’s 840 million dollar price tag, but the fact that it blew up…

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Market Rap's All Time Top ERTS Pickers

  Rank Return Last Action Trades Name Pic
 

1

100%

Short`ERTS`@`16.82

1

Drowsy Jay

 

2

-9.5%

Cover`ERTS`@`20.9

2

Perry Rod

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