Electronic Arts Stock Rises on Buyout, Merger Rumors

EA is trading just above its 2022 breakeven mark

Digital Content Manager
May 23, 2022 at 10:08 AM
facebook twitter linkedin


The shares of Electronic Arts Inc. (NASDAQ:EA) are up 2.6% to trade at $134.18 at last check, following reports that the video game name is looking for a buyer or merger deal, and has already held talks with Amazon.com (AMZN), Apple (AAPL), and Walt Disney (DIS).

On the charts, the security is bouncing off a May 10, roughly two-year low of $109.24. Shares last week broke above pressure at the 80-day moving average, which has been in place since February. Should today's gains hold, the security could settle at its highest level in roughly three months. Year-to-date, Electronic Arts stock is slightly above breakeven with a 2.6% gain. 

Analysts are already firmly bullish towards EA, with 17 of the 22 in coverage calling it a "buy" or better rating, while the 12-month consensus target price of $152.25 is a 12.7% premium to current levels. 

The options pits are far less optimistic. Over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), EA's 50-day put/call volume ratio of 1.32 stands higher than 97% of readings from the last year. This means long puts have been getting picked up at a much quicker-than-usual pace in the last 10 weeks. 

A shift could be in motion today, as options traders respond to these rumors. So far, 1,105 calls have already crossed the tape, which is three times the intraday average, and nearly double the 663 puts traded. Most popular is the June 140 call, followed by the 130 put in the same monthly series. 

 

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

SCHAEFFER'S JULY STOCKS REPORT AD
 


 


 
Special Offers from Schaeffer's Trading Partners