Faced with stumbling stock prices, fiscal loses and dwindling investor confidence, EA CEO, John Riccitiello, takes a stand.
With company shares having dropped 17% since their Q2 performance report one week ago and the Wall Street Journal suggesting that the House of Mouse pick them up on the cheap, EA CEO, John Riccitiello, took action today by purchasing 42,500 shares in his own company at a cost of USD $1.04 million. This brings the chief executive’s piece of EA to 89,794 shares, which adds up to about $2 million or .03 percent of EA’s total shares.
The purchase is intended to usher forth renewed investor confidence in the industry giant at a time when consumer confidence in EA couldn’t be higher with games like Rock Band 2, Mirror’s Edge and Dead Space this holiday season. EA has taken some bold new steps in the in year following the return of Riccitiello as CEO of the company, but with these steps also comes great risks and investments at a time when being less bullish is the key to surviving. It was only a week ago that EA announced a sizeable loss of $310 million, along with a six percent layoff of their workforce.
While there are many factors at play as to why this happened (Riccitiello points out the unexpected delay of the latest Harry Potter title as one), for the industry, these are just more signs of cracks appearing in the hull of the U.S.S. Recession Proof.
Published: Nov 5, 2008 04:00 pm