Rumors can be powerful forces in the economy, as evidenced by an 8.1 percent rise in Electronic Arts stock today following unsubstantiated rumors that Microsoft was interested in buying the publisher out.
What analysts and strategists are calling âunsubstantiated chatterâ had a profound effect on EA stock today, rising 8.1 percent to $20.01 during Nasdaq trading this afternoon.
âThereâs talk that Microsoft might be interested in acquiring Electronic Arts. Itâs unsubstantiated chatter, but itâs out there,â said Frederic Ruffy, an options strategist at WhatsTrading.com in New York.
And sometimes being out there is more than enough. Microsoft shares also rose during the day, gaining 1.1 percent to $26.05, despite analysts claiming that such a move makes no sense whatsoever.
But Trip Chowdhry, an analyst at Global Equities Research, said Electronic Arts was not on Microsoftâs âradar screenâ based on his industry contacts. âOur contacts just donât see Microsoft buying Electronic Arts, no synergies whatsoever, and also not Microsoftâs corporate primary focus right now,â Chowdhry wrote in an e-mailed note.
A quick glance about the internet finds that analysts largely agree â this doesnât seem like a likely move. Still, weâve reached out to Microsoft and EA alike, and will update the story once we receive any response.
UPDATE: We just received a comment from Microsoft. âMicrosoft has no plans to purchase Electronic Arts.â Clears that right up, now doesnât it?
Electronic Arts stock up on takeover talk-traders [Reuters â Thanks David!]
