Is Microsoft planning to purchase publishing giant Electronic Arts? That is the "unsubstantiated talk" which surfaced as of yesterday, with Reuters even jumping aboard the rumor bandwagon reporting that EA stocks took a sudden 8-percent leap. While this is the first we've heard of the noise, the idea isn't unfathomable; in fact, it could be considered karma given EA's semi-hostile track record with other companies.
But Frederic Ruffy, an options strategist at WhatsTrading.com in New York, turned his nose up at the idea, calling it "unsubstantiated chatter." Trip Chowdhry, an analyst at Global Equities Research, even added that EA isn't even on Microsoft's "radar screen" based on observations made by industry contacts. "Our contacts just don't see Microsoft buying Electronic Arts, no synergies whatsoever, and also not Microsoft's corporate primary focus right now," he said.
Analysts say that takeover rumors usually spark up about once every quarter. In addition to Microsoft's supposed love interest with EA, THQ is also the target of a separate takeover by another company, with its shares soaring up a whopping 13-percent as of Tuesday. Take-Two Interactive has also been a primary target for takeover as of late, with EA failing to acquire the company last year; Walt Disney Co. and Time Warner Inc. are now rumored to be circling the Redwood City, California company.
But as for the current rumor regarding Microsoft's supposed interest, the company refused o comment; an Electronic Arts representative was not available as well. Could this rumor be self-injected by EA traders to temporarily boost stock value? Is the rumor legit? Some analysts don't think so, but it's certainly not improbable that Microsoft has an eye for the publisher. After all, EA's library isn't too shabby.
UPDATE: Like a good government conspiracy, Microsoft has denied everything.