Many investors will admit that a good time to buy is when the prices are lower than low, yet those words of wisdom doesn't seem legitimate during current economical conditions. Apparently, Activision Blizzard's wallet doesn't agree.
The market can be tricky: invest in something while the prices are currently low, and hope it will increase in value when the economy begins to climb back out of its current dismal hole of depression. If the investment tanks, then so does the initial investment. With that said, it's hard to imagine Activision Blizzard shelling out money for new properties even though the company is currently the largest gaming publisher on the planet.
But with $3 billion in cash burning a hole in its pocket and no debt to speak of, the company is definitely considering acquisitions while the prices are down to the ground. Buying new intellectual property licensing rights would certainly open doors for the company, especially those that would eventually fill holes in Activision Blizzard's overall portfolio... which the company is looking to do as well Activision Blizzard already started the process with two upcoming games: Singularity, DJ Hero and an unnamed racing title.
“The combination of Activision holding a fair amount of cash and presumably prices being depressed, not only for publicly traded companies, but also likely for new intellectual property licensing rights, should certainly create opportunities,” admitted Activision president and CEO Mike Griffith in his interview with Bloomberg.
According to Bloomberg, Activision rose 20 cents (2 percent) to $10.07 in Nasdaq Stock Market trading as of Wednesday; its shares have gained 17 percent this year alone. Although sitting pretty with mammoth franchises under its belt including Call of Duty, Guitar Hero and the uber-popular MMORPG World of Warcraft, it's interesting to speculate what and whom Activision is likely to assimilate next. With Midway Games ready to throw the mortal Kombat franchise on the chopping block, the infamous fighting IP would certainly fill a void in Activision's portfolio.
"We won’t rush to judgment just because we have cash," says Griffith. "We will be very disciplined."
Although Activision Blizzard is sitting on piles of cash and looking for new blood, the company certainly isn't hording IPs. In fact, by the end of 2008, the company purged many of its Sierra-branded franchises including Ghostbusters, Brutal Legend and even 50 Cent: Blood on the Sand. With that said, the company isn't looking for just any IP to fill the gaps, but those with high potential.
On another note, Activision Blizzard today announced that Thomas Tippl, CFO of Activision Blizzard, Inc, will be presenting at the 7th Annual Wedbush Morgan Securities New York MAC: Management Access Conference on Wednesday, March 11th at 8:00 a.m. (ET) at the Le Parker Meridien Hotel. Those interested can listen to the broadcast here.