EA Stock Soars On Microsoft Buyout Rumors

Illustration for article titled EA Stock Soars On Microsoft Buyout Rumors

Rumors can be powerful forces in the economy, as evidenced by an 8.1 percent rise in Electronic Arts stock today following unsubstantiated rumors that Microsoft was interested in buying the publisher out.


What analysts and strategists are calling "unsubstantiated chatter" had a profound effect on EA stock today, rising 8.1 percent to $20.01 during Nasdaq trading this afternoon.

"There's talk that Microsoft might be interested in acquiring Electronic Arts. It's unsubstantiated chatter, but it's out there," said Frederic Ruffy, an options strategist at WhatsTrading.com in New York.


And sometimes being out there is more than enough. Microsoft shares also rose during the day, gaining 1.1 percent to $26.05, despite analysts claiming that such a move makes no sense whatsoever.

But Trip Chowdhry, an analyst at Global Equities Research, said Electronic Arts was not on Microsoft's "radar screen" based on his industry contacts. "Our contacts just don't see Microsoft buying Electronic Arts, no synergies whatsoever, and also not Microsoft's corporate primary focus right now," Chowdhry wrote in an e-mailed note.

A quick glance about the internet finds that analysts largely agree - this doesn't seem like a likely move. Still, we've reached out to Microsoft and EA alike, and will update the story once we receive any response.

UPDATE: We just received a comment from Microsoft. "Microsoft has no plans to purchase Electronic Arts." Clears that right up, now doesn't it?


Electronic Arts stock up on takeover talk-traders [Reuters - Thanks David!]

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What blows my mind is all the people saying "MS loves money" and talking about how MS is just some big greedy corporation meddling in gaming. What the hell did you think Sony was when they got into gaming? It astounds me at how many people apparently think Sony started out as a gaming company.

Are these people under 10 years old? Sony is a huge company outside of their gaming division too. And yeah, they also "love money". So does Nintendo. That's what companies do, they make money.