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Street reacts to EA exec shuffling
Street reacts to EA exec shuffling-September 2024
Sep 22, 2024 7:28 PM

  After the trading day ended Friday, Electronic Arts (NASDAQ: ERTS) announced the departure of EA Worldwide Studios president Don Mattrick and executive vice president Bruce McMillan and subsequently reassigned numerous executives to fill their vacancies. Investors had the long Labor Day weekend to mull the moves over, and they reacted with a sell-off that saw the publishing giant's stock drop $1.28 over the course of the day, just over two percent, finishing off at $56.14.

  While the departures have precipitated a short-term drop in EA's stock price, industry analysts Michael Pachter and Edward Woo with Wedbush Morgan Securities don't believe it's going to last.

  "We are not concerned with the management changes and believe that EA has one of the strongest management teams to match its leading stable of marquee games and development talent," the pair said in a report to investors issued today. "It is important to note that EA's game quality, as measured by GameRankings.com, had noticeably declined over the past two years. This fact, accompanied by the company's slower than expected revenue growth over the past year, may have contributed to Mr. Mattrick's decision to seek other opportunities."

  Wedbush Morgan maintained its Hold rating on EA, as well as its previous estimates for the stock's performance. EA stock was down slightly in after-hours trading as of press time, with a going price of $56.10.

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