Cramer’s Hidden Video Game Investment (ATVI, ERTS, VIA, PWRD)

On tonight’s MAD MONEY on CNBC, Jim Cramer was promoting his new book and he advised buying one share of stock for your kids out there in a product and company they interact with and can track.  He was reviewing the merger pact for Activision (NASDAQ: ATVI) from Vivendi’s Blizzard, but his real play here was in Viacom (NYSE: VIA) based upon it winning from the music of Rockband video game that is in his opinion even better than Activision’s "Guitar Hero" franchise.

Cramer briefly also noted that he doesn’t buy into the notion that Electronic Arts (NASDAQ:ERTS) should have traded lower because the new Blizzard would be stronger competition.  In fact, he said that he thinks some of the larger conglomerates should take a look at maybe reviewing the possibility of making a move to buy Electronic Arts for $70 per share.

24/7 Wall St. was expecting a merger in Activision as one of the candidates in the video game sector, although this merger came from an entirely angle.  We are retooling our video game industry sector for our Special Situation Investing Newsletter subscribers to show which stocks would benefit from which partners now that the merger game changed in here.

Perfect World Co., Ltd. (NASDAQ:PWRD) is a Chinese MMORPG operator that actually does report normal financials that he has overlooked in the past because of skepticism over Chinese names that sound fishy.  But now that he’s looked at it, he thinks you can own it.  Shares closed up 0.45% at $24.33 but shares are at $26.30 since he touted it.  The 52-week trading range is $17.40 to $37.00.  Cramer said to use a limit and not to play it after-hours, but he said he thinks it can see $40 next year.

Jon C. Ogg
December 3, 2007