Activision Blizzard

Trade Activision Blizzard Stock

Activision Blizzard was created by the merger of Activision Inc. and Vivendi Games in July 2008. It is based in Santa Monica, California, United States, and is the largest U.S. and European gaming company by both revenues and stock market capitalization. The Activision Blizzard name currently has five different business units:

• Activision Publishing
• Blizzard Entertainment
• King (Mobile Gaming)
• Major League Gaming (Sports Titles)
• Activision Blizzard Studios

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Besides these units, Activision Blizzard also owns and operates several independent game development studios. These include Toys for Bob, High Moon Studios, Infinity Ward, and Treyarch.

The Activision name goes back to October 1979, when the company was established in Sunnyvale, CA by a group of former Atari game designers who were upset by their treatment at Atari. That made it the very first independent, third-party console game development studio.

Activision Blizzard Gaming Titles

Even non-gamers are likely to recognize some of the intellectual properties which Activision Blizzard owns. These include Call of Duty, Spyro/Skylanders, and Guitar Hero under the Activision studio’s branding, and Overwatch, Hearthstone, Diablo, StarCraft, and World of Warcraft under the Blizzard Entertainment label. The King mobile gaming unit also includes the Candy Crush Saga mobile gaming label. The Activision Blizzard titles have broken numerous release and revenue records over the years.

Activision Blizzard Price History

Activision Blizzard stocks trade on the Nasdaq stock exchange (NASDAQ: ATVI) and have been a part of the S&P 500 since 2015.

Activision stocks debuted in 1993 at $1.25 a share, but the stock remained relatively unchanged for seven years before finally beginning to rise at the start of 2001. The stocks continued to rally over the next 18 months, finally reaching a high of $4.38 in June 2002. Shares pulled back, losing more than 50% over the next 10 months.

The Rally before the Merger

Activision stocks returned over 400% from April 2003 through September 2005 rising from a low of $1.62 to $8.65 by September 2005. The stock spent the next 10 months consolidating, trading down to $5.23 a share by July 2006.

The Console Rally

From that low shares took off in response to the November 2005 Microsoft Xbox 360 release and in anticipation of the November 2006 release of the PlayStation 3 gaming console from Sony as well as the Nintendo Wii console in the same month. Investors were understandably excited about the potential for Activision since a new generation of gaming consoles also meant a new stable of titles for Activision to sell. Gamers were excited to upgrade their games to take advantage of the faster processors, better graphics, and improved gameplay.

As the console rally began to slow in 2008 investors learned of the potential merger between Activision and Vivendi Games. By the time the merger was completed in July 2008, Activision stocks had rallied all the way to $19.28 a share.

The Global Financial Crisis

Not even game companies avoided the fallout from the global financial crisis. Following the merger that created Activision Blizzard shares plunged, losing more than 60% over the next six months and reaching a low of $8.14 in January 2009. Shares bounced modestly, regaining the $10 level soon after, but then spent the next four years trading in a range of $11 to $13 for the most part as there was no catalyst to kick off a rally for the Activision stocks.

Another Console Rally

In 2013 Sony, Microsoft, and Nintendo all released the next generation of their consoles, and like in 2006 investors greeted that release by buying Activision stocks, sending the price from around $11 in January 2013 to nearly $40 by January 2016. The console rally catalyst had worn off by then, but Activision stock was able to keep moving higher on the back of general strength in the equity markets. By September 2018 the stock had reached an all-time high of $84.68 a share.

Unfortunately, a shaky outlook for the overall market started a drop in shares in October, and softer than hoped for guidance for holiday sales from Activision itself caused shares to plunge to $39.85 by February 2019. After a few choppy months the stock began to trend higher once more, and by the start of 2020 was trading at $59.90 a share.

Activision Blizzard Trading Ideas

You can clearly see from the history of Activision’s stocks price that the release of new generations of gaming consoles have been the best catalyst for a rally. In 2006 and again in 2013 shares took off higher in response to new consoles being released by Sony, Microsoft, and Nintendo.

That’s good news for investors because 2020 features another new generation of hardware console from Sony and Microsoft. Both companies plan on releasing their new generation consoles around the 2020 holiday season. The combination of next-generation consoles and holiday shopping should propel shares higher well into 2021, and possibly into 2022 as well. Shares have already begun moving higher, but remain well off their September 2018 all-time high. That gives investors the opportunity to get into the stock while it is still reasonably priced.

Traders may want to watch for dips in the stock price for good entry points. In 2019 most dips were around 10%, and considering the bullish fundamentals for the stock looking for larger dips might cause traders to miss good entry points for the stock in 2020.

Disclaimer: This is a general analysis and not to be viewed or construed as actual trading advice or a recommendation of any kind and just an example of how a particular instrument could, potentially, be traded.

In Conclusion

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