Electronic Arts Inc. (NASDAQ: EA) is going to see if a new chief executive officer will get its growth fortunes back on track. The video game giant has now confirmed that CEO John Riccitiello will step down effective March 30. He will also lose his position as a member of the Board of Directors. Wall St. so far is glad to see the transition.
This is a move which signals that business remains challenged, and its implied guidance also confirms that. The EA board of directors has appointed Larry Probst as EA’s executive chairman while it looks for a permanent CEO. EA has signaled that it will consider internal and external candidates and will also hire a leading executive search firm.
The company’s quote included, “We have mutually agreed that this is the right time for a leadership transition.” That might not be a firing and the departure might not be on bad terms. The flip-side is that this confirms that the company knows it will take new blood to drive initiatives in whatever form they are going to take on.
We noted that the implication is for more weakness. EA signaled that revenues and earnings for the current quarter will be at the low-end of expectations or will even fall slightly below its previously issued guidance.
Still, the stock is up on news that new blood will bring new direction for the company. EA shares closed down 0.9% at $18.71 on the day against a 52-week range of $10.77 to $19.51. Being that close to a 52-week high is very misleading. EA shares were peaking at almost $25 in 2011 and its stock was north of $50 back before the recession took hold.
EA shares are up over 3% at $19.31. A CEO has to feel bad when issuing an earnings and sales warning but thew stock rises because a new unnamed CEO will get to change things.
New blood is what this company needs. The question which remains to be answered is whether or not EA has waited too long to bring in new blood. Hopefully it doesn’t think that an out-of-favor recently fired daily deals CEO in Chicago is the answer.
Is Your Money Earning the Best Possible Rate? (Sponsor)
Let’s face it: If your money is just sitting in a checking account, you’re losing value every single day. With most checking accounts offering little to no interest, the cash you worked so hard to save is gradually being eroded by inflation.
However, by moving that money into a high-yield savings account, you can put your cash to work, growing steadily with little to no effort on your part. In just a few clicks, you can set up a high-yield savings account and start earning interest immediately.
There are plenty of reputable banks and online platforms that offer competitive rates, and many of them come with zero fees and no minimum balance requirements. Click here to see if you’re earning the best possible rate on your money!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
