Options traders play video game stocks after wins
Activision Blizzard released second quarter results better than Wall Street forecast
Activision Blizzard Inc (NASDAQ: ATVI) is no stranger to the projector, but recently this projector is more akin to lighting an interrogation room. In the midst of a lawsuit surrounding the company’s toxic workplace, a number of executives have stepped down. And now WilmerHale, the law firm hired to review Activision Blizzard’s policies and procedures, is under fire for its history of fighting unions, and workers at Activision, Blizzard and other King studios have formed a new coalition called the ABK Workers Alliance in response.
All of this drama is taking place in the middle of earnings season. The video game maker reported second quarter earnings and revenue above Wall Street estimates after yesterday’s close, and provided optimistic forecasts while citing strong demand for its “Candy Crush” and “Call” franchises. of Duty “. In response, the stock was last seen up 2.9% to trade at $ 81.99.
A number of bear tickets arrived after the event, including one from MKM Partners in the form of a target price reduction from $ 12 to $ 108 from $ 120. Today’s analyst change is no surprise given that the majority of analysts were bullish on ATVI as of today, and the stock is down 12% in 2021. All 18 call the stock a “buy” or better, while the consensus price target of $ 117 is a steep premium of 38.1% from last night’s close.
Today’s option stands are full of speculation on both sides of the aisle. So far, 17,000 calls and 8,358 puts have crossed the band, a total volume four times the intraday average. The most popular is the weekly 8/6 85-shot call, followed by the 75-shot put of the same series.
Yesterday ATVI fell to its lowest trading level since November 30. Despite today’s mini-rally, stocks broke their 320-day moving average last week and fell 14% last month.