Business Expert, Company

Activision Blizzard CEO Bobby Kotick Sees Strong Trading Day

Activision Blizzard had a strong trading day on the stock market, with shares increasing by 6.73%. This increase is thanks in part to CEO Bobby Kotick, who has been with the company since 1991 and led it through some of its most successful years. Under his leadership, Activision Blizzard has become one of the largest gaming companies in the world.

Many investors and analysts believe that the company’s future is in mobile. With a share price of $31.29, Activision Blizzard is currently not cheap – it’s trading at a P/E ratio of 30, which indicates how much an investor should expect to gain from every dollar invested in the company. This P/E ratio is a significant premium to rival Electronic Arts (EA), which is currently trading at a P/E ratio of 17.

Activision Blizzard has decided not to split its stock until December 2015, but will instead institute a “cash dividend” program in the meantime. The company states that it expects to make $150 million in fiscal year 2013 and $200 million in fiscal year 2014 from this program. On the other hand, the company has already let go of over 500 employees earlier this year, a move that saved it a lot more money than this dividend program will provide.

The “cash dividend” program will pay out $0.15 per share to investors starting now until December 2015, but most of the money is expected to come from a stock buyback program starting in 2015. Activision Blizzard is going to buy back up to $1 billion of its shares, which would reduce their share price and allow more shares to be bought – something that will increase the “cash dividend” per share over time.

Kotick believes that this buyback will help increase the company’s share price in the long term, something that might attract Activision Blizzard shareholders. The new program is expected to start on December 15, 2014.

Original source to learn more: https://www.sloansportsconference.com/people/bobby-kotick