Activision, GameStop shares jump to new highs

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NEW YORK -- Shares of video game publisher Activision Inc. jumped to a 52-week high Wednesday on the heels of a solid fourth-quarter and full-year report from No. 1 game retailer GameStop Inc., whose stock hit a record high for the second day in a row.

Activision, whose games include the "Guitar Hero" and "Tony Hawk" series, is receiving positive early buzz from its third "Spider-Man" title, said Lazard Capital Markets analyst Colin Sebastian in a note to investors.

"Spider-Man 3," the game, is slated to launch in May, simultaneously with the movie.

Activision also continues to reap the benefits of its catalog titles, most notably "Guitar Hero II," which lets players pretend they are rock stars, and the World War II game "Call of Duty."

The analyst boosted his fiscal fourth-quarter outlook for Activision, to sales of $225 million from $200 million, and to a net loss of 7 cents per share from a loss of 8 cents. (Video game software publishers make much of their money in the fiscal third quarter due to the holiday shopping season, and often see losses in other quarters.)

Shares of the Santa Monica, Calif., company rose 88 cents, or 4.9%, to close at $19.01 on the Nasdaq Stock Market. Earlier, shares traded as high as $19.20, eclipsing a previous 52-week high of $18.79.

GameStop's shares, meanwhile, rose $1.44, or 4.6%, to end at $32.60 on the New York Stock Exchange. The stock hit its prior, split-adjusted all-time high of $31.43 on Tuesday after the company posted its results.

The company's management called the recent European launch of Sony Corp.'s PlayStation 3 "very good, but not great," Sebastian wrote, adding that this likely means Sony is "coming close to reaching its one million unit shipment target."

The PlayStation 3 was launched in the U.S. in November.

The analyst also noted that March video game retail sales might be slightly hurt by short supplies of the Nintendo Wii and Nintendo DS.

Sebastian kept a "Buy" rating on Activision with a target price of $20. He rates GameStop "Buy."






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