Electronic Arts up on merger rumor
Shares of Electronic Arts Inc. rose 8.4 percent in heavy trading Monday as the stock caught up to the gains of other video-game makers, and rumors spread that it might be close to acquiring Ubisoft Entertainment SA of France.
From the end of April into June, as the video game makers reported earnings for the first three months of the year, the stocks of THQ Inc., Activision Inc., and Take-Two Interactive Software Inc. have made gains, noted Wedbush Morgan Securities analyst Michael Pachter.
Meanwhile, shares of Redwood City, Calif.-based Electronic Arts have stayed about the same, closing at $53.50 Friday from the $53.39 of April 29.
``I would say that what you are seeing today is a narrowing of the valuation gap,'' Pachter said. ``Momentum investors saw that Electronic Arts was lagging and forced it up,'' and short sellers got squeezed as well.
Shares of Electronic Arts rose $4.50 to close Monday at $58 on volume of 11.4 million, compared with average daily volume of 5.5 million on the Nasdaq Stock Market.