Yahoo Finance If You Invested $1000 in Activision Blizzard, Inc a Decade Ago, This is How Much It'd Be Worth Now
For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in Activision Blizzard, Inc (ATVI) ten years ago? It may not have been easy to hold on to ATVI for all that time, but if you did, how much would your investment be worth today?
Activision Blizzard, Inc's Business In-Depth
With that in mind, let's take a look at Activision Blizzard, Inc's main business drivers.
Activision Blizzard, Inc. is a leading developer and publisher of console, online and mobile games. The company’s Call of Duty is one of the most popular gaming franchises globally. Its Overwatch League can be considered a pioneer of the esports concept.
Activision Blizzard benefited from the shift to digital download format. The company’s policy of updating games all the year-round increased revenue visibility and stability.
Moreover, the acquisition of King Digital in 2016 fortified Activision’s footprint in the mobile genre.
On Jan 18, 2022, the company entered into an agreement with Microsoft Corporation and Anchorage Merger Sub Inc., a wholly owned subsidiary of Microsoft. Microsoft agreed to acquire the company for $95 per issued and outstanding share of common stock, in an all-cash transaction of $68.7 billion. The merger is currently expected to close in Microsoft’s fiscal year ending Jun 30, 2023.
Activision reported revenues of $7.53 billion in 2022.
The Santa Monica, CA-based company operates under three major segments and incorporates studio, media networks and distribution businesses under the “Others” segment.
Activision creates and publishes games for consoles, desktops, mobile and tablet. Franchises under this segment include Call of Duty, Crash and Spyro. The segment generated revenues of $3.27 billion and accounted for 40.5% of 2022 revenues.
Blizzard publishes games particularly for the PC format. It also maintains a proprietary online gaming service, Blizzard Battle.net, which facilitates digital distribution of Blizzard content and selected Activision content, online social connectivity, and the creation of user-generated content. The Overwatch League comes under this segment. The segment generated revenues of $2.01 billion and accounted for 24.9% of revenues.
King operates as an independent unit. The segment generated revenues of $2.78 billion and accounted for 34.4% of revenues.
The Other division includes Activision Blizzard Studios that makes original film and television content based on the company’s huge IP library. The segment also consists Activision Blizzard Distribution business.
Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Activision Blizzard, Inc ten years ago, you're likely feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in April 2013 would be worth $5,790.40, or a gain of 479.04%, as of April 12, 2023, and this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 157.88% and gold's return of 23.32% over the same time frame.
Going forward, analysts are expecting more upside for ATVI.
Activision’s top line is expected to benefit from an upcoming strong gaming portfolio of Call of Duty (COD), Hearthstone, World of Warcraft (WoW) and Candy Crush franchises. This is expected to gain traction and boost net bookings. However in the third-quarter 2022, Activision has been facing headwinds from hardware supply chain issues that have lowered PC and consoles revenues. The decline in video game spending due to the resumption of work from office and outdoor entertainment in the quarter has also affected Activision’s top-line growth. The acquisition of the company by Microsoft which is expected to close in fiscal year 2023 is under the second phase of review within the UK. However its strong liquidity position and free cash flow generation ability is noteworthy. Shares of Activision have outperformed the industry year to date.
The stock is up 7.59% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 2 higher, for fiscal 2023. The consensus estimate has moved up as well.
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Activision Blizzard, Inc (ATVI) : Free Stock Analysis Report
