Q2 STOCKS TO BUY

C-Suite Shake-Up Puts Pressure on Activision Blizzard Stock

Activision Blizzard stock fell to an annual low last week

Managing Editor
Jan 2, 2019 at 9:37 AM
facebook X logo linkedin


The shares of Activision Blizzard, Inc. (NASDAQ:ATVI) are poised to start off the new year on a dour note, down 2% this morning at $45.62. Late Monday night, a securities filing revealed the video game maker had placed Chief Financial Officer (CFO) Spencer Neumann on paid leave, with plans to terminate him. According to the Wall Street Journal, Neumann is expected to be named the new CFO (subscription required) of Netflix (NFLX). Dennis Durkin has been reappointed as Activision Blizzard's CFO.

Activision Blizzard stock shed 44% last quarter, its worst since 2000. A bear note helped stoke the holiday headwinds, sending ATVI to an annual low of $43.71 on Dec. 26. While the shares briefly bounced from there, they have been turned away once more by their 20-day moving average, a level of resistance since early October .

There's reason to believe things could get worse for ATVI. For one, most analysts are still bullish on the equity, so more bear notes could put pressure on the shares. Of the 23 brokerages covering ATVI, 19 rate it a "buy" or better, while its consensus 12-month price target of $70.81 is a 55% premium to Monday's closing perch of $46.57. 

Shorts have been heading for the exits, though. Short interest fell by 17% in the last two reporting periods to 17.95 million shares, the fewest since mid-August. This represents a meager 2.4% of the stock's total available float, indicating there is ample room aboard the bearish bandwagon.

There is also optimism to be unwound in the options pits. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), ATVI's 10-day call/put volume ratio of 3.44 ranks in the 86th annual percentile. This shows not only that long calls have outnumbered puts by a more than 3-to-1 ratio, but options traders have quickly picked up the pace of call buying relative to put buying in recent weeks.

Regardless of direction, those wanting to bet on the video game stock may want to consider an options buying strategy, as ATVI has been a strong target for anyone buying premium over the last 12 months. This is per the stock's Schaeffer's Volatility Scorecard (SVS) of 93 out of a possible 100, which indicates the security has tended to make outsized moves over the past year, relative to what the options market has priced in.

 
 

“Buy This Stock Now!” - Expert Who Called 11x On TSLA

He called a rare 11x on Tesla…

But now, thanks to Elon & Trump’s new alliance…

He says there’s a new opportunity that could be 1,000x BIGGER than Tesla – and it could completely revolutionize a $23 Trillion market.

It’s trading for less than $5 per share right now…

But it won’t be under the radar for long.

Discover The 1,000x Bigger Elon Opportunity Here

GRAND SLAM COUNTDOWN

 
 

Featured Articles from Trusted Partners:

👀Learn How Dividends Create Passive Income for Life
Receive $200 Off Motley Fool Epic. The Motley Fool Epic $299 discounted offer is based on $499/year list price. Introductory promotion for new members only. Take control of your money and your portfolio with Motley Fool Epic.

💵New Income System Could Pay You $4,243 Monthly
You could collect an average of $4,243 per month starting as early as next week with a new payout system for income investors. New registrations are being accepted for investors who want to be in a position to start with their first payout next week.

🚀Easy 92% Crypto Dividends (No Coins Required)
COIN stock doesn't pay a dividend... But there's actually a new way to collect a massive dividend that's indirectly based on the stock and offers a terrific monthly income (currently yielding nearly 92% on a forward basis).

🤝Free Advisor Match with Wiseradvisor.com
Don't leave your retirement to chance! Get matched with a trusted financial expert for FREE and make the most of your tax refund. Get started now.

⚠️Dennis Quaid's #1 Warning for Americans
Here's the thing: life doesn't come with guarantees. The economy shifts, markets stumble, and years of hard work could slip through your fingers like sand. But it doesn't have to be that way for you. So request a free copy of this Gold & Silver Guide that will arrive right to your doorstep when you act now.

 

 
 

Follow us on X, Follow us on Twitter