A look at how Trump's violent video game concerns are impacting EA, ATVI and GME
Stocks are taking a serious hit today, as trade tensions between the U.S. and China ramp up. Video game stocks are in hot water today too, after President Donald Trump blamed video game violence for contributing to this weekend's mass shooting tragedies. Three stocks affected are Electronic Arts Inc. (NASDAQ:EA), Activision Blizzard, Inc. (NASDAQ:ATVI), and GameStop Corp. (NYSE:GME). Below, we'll explore how Trump's latest comments are impacting EA, ATVI, and GME stocks.
ATVI Stock Set for Worst Day in Months
Activision Blizzard stock has taken the biggest hit of the three, down 6.9% at $45.79, pacing for its worst day since February. The dip comes just after ATVI hit a six-month intraday high of $51.35 last Friday, before eventually ending the session lower on the day. Now, the equity is testing its footing back atop its 120-day moving, a trendline that has served as support on the charts during the past few months.
Unsurprisingly, options bears have taken interest in the "Call of Duty" creator. So far, roughly 11,000 puts have crossed the tape, three times the typical volume. The weekly 8/9 43-strike put is by far the most popular, with contracts being sold to open here. This suggests that these traders are expecting the stock to hold atop the $43 region until the contracts expire this Friday -- one day after the firm's quarterly earnings report is due out.
EA Stock Slides
Electronic Arts stock is down 4.1% at $89.13. EA shares have been in a channel of lower lows since February, and have surrendered nearly 32% year-to-date.
Should this negative price action persist, a round of analysts downgrades and price-target cuts could be just on the horizon. Right now, 18 of the 26 brokerage firms in coverage call the security a "buy" or better, with not a single "sell" in sight. What's more, the consensus 12-month price target of $111.48 hasn't been touched in about 10 months, and represents a solid 25% premium to current levels.
GameStop Stock Hits Record Low
GME has lost 5.2% to trade at $3.58, just clocking a new all-time low of $3.57 earlier today. The stock has been on a nearly continuous slide since late 2015, compounded by a post-earnings bear gap in June. At this rate, the video game retailer is headed for its worst year ever, too, down 71.5% for 2019.
Naturally, all this negative price action has had short sellers coming out in droves. In the last two reporting periods, short interest surged 42.6% to 66.89 million shares -- its highest on record. These pessimistic positions now represent an impressive 67.1% of the stock's available float, or over 11 days of trading, at GME's average daily volume.