Motley Fool and ATVI
I don't think that Motley Fool thinks a WDDD win would have on ATVI, because even a big win probably would not have much effect on ATVI. I think it is more that a WDDD win is only a small percent of what ATVI is worth.
As an example, assume that WDDD wins, at some point, an awards of somewhere around $100 million or so. Since there are somewhere around 100 million shares (I think there are about 110 million after all of the options and such get exercised) the stock would have about $1 in cash per share, so it rises to $1 and everyone who bought the WDDD stock would be 'in the green'.
One the other side, ATVI is at a market cap of 23 billion today. An award of $100 million to WDDD would be less than one percent of the current market cap of ATVI and have less effect on the stock price than the normal, daily 'trading noise' that is goes through each day. Yearly net income is usually a little over $1 billion, so even an award of a few hundred million to WDDD would just be a 'bump in the road' in the course of a year.
That is why I do not think Motley Fool mentions WDDD, in the long run for a company like ATVI it is not that big of a problem.
As a side note, if someday on a WDDD win, you can tell if the market is overreacting by how much market cap ATVI loses. If the amount is greater than the award, then you know people are not thinking and depending the the magnitude of the over reaction, it could be a buying opportunity for ATVI.
Someday when WDDD wins, look to ATVI and see if there is any kind of drop, if it is something like 5% or 10%, then people are overreacting to the award and probably will recover within several days once people people have a chance to figure out the effect on ATVI.
Louis J. Desy Jr.
