Dexter111 said:
Azuaron said:
Yeah... this isn't happening. EA makes money hand over fist. Why would they cash out to someone who can't buy them outright upfront? "Why yes, I would like to give you a cut of all my future profits for 1/4 my current worth!"
That not how things work, EA is a publicly traded company and doesn't have much say in what investors do with their stock, they can either keep it or sell it off to a third party if they think there's more profit to be made from that. (e.g. Share price at the moment is 16$, if they offer 20-25$ per share buyout they might just take them up on the offer)
The party with a majority share of over 50% (or whoever owns the largest percent of stock) has the most say in how the company conducts itself and works in turn.
This is still highly unlikely, but for wholly other reasons. It would be delicious if it did happen though...
That would be a hostile takeover. But it sounds like Nexon wants the EA board of directors to agree to being bought, which is not going to happen. And, still, they could only buy a quarter, probably less since once they start buying in that kind of volume the price would skyrocket, and that's assuming there are enough EA investors willing to sell.
Kumagawa Misogi said:
Er you do know EA has been losing hundreds of millions of dollars for all but 1 quarter of the last 2 years.
Citation. Or, here, I'll do it for you [http://www.google.com/finance?q=NASDAQ:EA&fstype=ii]. Looks like net profits in 2011 Q1 and Q2, and, if you look at their yearly data, you can see they've been steadily trending upward since a dip in 2009. I wish I could see full quarterly data for 2010, I bet they had a good quarter or two then.
Further, even if they are generally "losing" money, that doesn't mean much, as the board/CEO is still being given millions of dollars. Also, they have zero debt, which is pretty amazing. And, they seem to be "losing" money by buying properties, thereby increasing their assets, thereby increasing their revenues (you'll notice 2009 has the largest net loss, but the greatest revenues).
That being said, I'd be worried about a company posting 20% net losses for six years straight, but we can see that they aren't. Not only are they averaging around 10% net loss for the last six years, but they're steadily increasing their net income without decreasing revenues; they're spending less and making steady money, so their investments are paying off.
Generally speaking, a business doesn't want excess profits, anyway. Profits get taxed. A business wants to reinvest its revenue into assets and, after profits have been high, spend their "war chest" on acquiring new assets, which will then show a "loss" for a given quarter. Also, executive bonuses.
Regardless, if Nexon buys EA, they'll almost certainly replace the board of directors, and probably the CEO. And, since the board of directors and CEO are the ones who make the decision to sell (unless Nexon gets hostile), they don't have an incentive to do so as long as they, personally, are making money hand over fist (which they are; EA's CEO has been averaging $15.36 million per year for the last six years, and has been CEO for 15 years) OR Nexon is able to make them an amazing deal (which it can't).
