Electronic Arts Shoots Higher on Amazon Bid Report
2022.08.26 15:06
By Geoffrey Smith
Investing.com — Electronic Arts (NASDAQ:EA) stock surged in premarket trading on Friday in response to a report that Amazon (NASDAQ:AMZN) is about to bid for the videogames publisher.
Speculation about a takeover has been circling around EA ever since Microsoft (NASDAQ:MSFT) swooped to buy rival Activision Blizzard (NASDAQ:ATVI) to flesh out its presence in gaming. Walt Disney (NYSE:DIS) and Apple (NASDAQ:AAPL) had also been named as potential suitors but none of the three has commented publicly on the possibility.
According to USA Today’s Forthewin sports segment, news of an offer from Amazon may come as early as Friday.
If confirmed, the news would add another dimension to the e-commerce giant’s deal-making since Andy Jassy took over as chief executive from founder Jeff Bezos.
Amazon’s recent M&A activity has focused on health care, with the acquisition of 1Life, operator of the One Medical chain of primary care clinics, for $3.9 billion last month. This week, it was reported as being interested in bidding for online health provider Signify. The company’s apparent switch to buying in health expertise has also led to it closing its own telehealth unit.
The move also comes at a time of growing uncertainty over EA’s outlook. Growth in gaming demand has slowed as the pandemic has ended, allowing locked-down users to venture out into the physical world again. Its long-term partnership with soccer’s world body over the FIFA series of games, for years one of its largest cash cows, also broke down in May.
EA stock rose over 14% in premarket trading to what would be a nine-month high if the opening price validates that move. That would price the company at around $40 billion. Amazon stock fell 0.8%.
