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Star Wars Scare Sparks EA Options Activity; Earnings Beat Helps UAL Take Off

EA reportedly canceled its open-world "Star Wars" video game

Managing Editor
Jan 16, 2019 at 2:17 PM
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Stocks are confidently in the black today, thanks to an encouraging start to earnings season. While video game maker Electronic Arts Inc. (NASDAQ:EA) is down, airliner United Continental Holdings Inc (NYSE:UAL) and home improvement name ToughBuilt Industries Inc (NASDAQ:TBLT) are pushing higher. Below, we'll take a look at what's moving the shares of EA, UAL, and TBLT.

EA Pulls Back Amid "Star Wars" Rumors

Late yesterday, reports emerged that Electronic Arts was nixing plans for an open-world "Star Wars" video game, and instead will make a smaller-scale game by 2020. In response to the backlash, however, the company today told Reuters that it is "fully committed to making more 'Star Wars' games," and will "share more about our new projects when the time is right." As such, EA stock has pared its losses, last seen 0.6% lower at $88.99, after earlier flirting with a 4% deficit.

The so-called "loser" of the holiday season fell to a two-year low of $73.91 on Dec. 26. Since then, however, the shares have tacked on 20%.

EA options action has ramped up today, with volume skewed toward the call side. So far, about 15,000 calls have changed hands, triple the average intraday amount.The weekly 2/1 93.50-strike call is most popular, with a big block of more than 6,000 contracts likely bought to open just minutes after the Electronic Arts statement. Buyers of the call expect the shares to rebound atop $93.50 by the close on Friday, Feb. 1.

Revenue Beat Fuels UAL's Best Day Since July

United Continental stock is up 6.1% to trade at $86.14, after the airliner reported fourth-quarter earnings and revenue that exceeded analyst expectations. The closely watched airline metric passenger revenue per available seat mile (PRASM) also beat forecasts. This has helped UAL break out of a recent downtrend, with it gearing up to be the shares' best day since July 18.

A continued short squeeze could keep the wind at UAL's back. Short interest fell 9.1% in the last two reporting periods, to 16.14 million shares. However, this still represents a healthy 7% of the equity's total available float, and 3.8 times the average daily trading volume.

ToughBuilt Stock Triples on Menards Deal

One of the top stocks of the Nasdaq today is ToughBuilt, up a whopping 200% to trade at $3.75, and earlier nabbing a record high of $5.85, after launching product sales with Menards home improvement chain. TBLT is set for its highest close ever, but is still pacing to end beneath $5 -- its Dec. 3 initial public offering (IPO) price.

 

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