Warren Buffett Stock Analysis
ELECTRONIC ARTS INC
Stock market is much riskier than people think due to variation of market conditions. Before making a smart investment in a company, investors should observe the performance in the past and predict the future trend. To identify if a company is worth investing in, Warren Buffett, one of the greatest investors in the world, recommended four aspects:
1) Is the business understandable?
2) How are long term prospects of the business?
3) Is the management of that business honest and competent?
4) Is the value of that business worth it to invest?
In this paper, EA, Inc. will be evaluated as an example.
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It was a virtual fantasy world that supported thousands of players from around the world. At that time, this game could be said as ambitious because the new technology and new idea which had never been attempted before. This was the first true massively multiplayer online game which was really creative. EA had never set foot in this area of online games, but except for some difficulties in the beginning, Ultima Online had been achieved great success that the game is still operating even today. Although Ultima Online brought great benefits to the company, other efforts, such as Motor City Online, Earth & Beyond and the Majestic, had a very short life cycle. In 2006, EA bought Mythic Entertainment which is the creators of Dark Age of Camelot. Nowadays, Ea is continuing to support this game, and studios are engaged in the development of a new product called Warhammer Online. EA也向休闲玩家通过POGO.com提供一些简单的在线游戏。
EA also offers some simple online games to casual gamers through POGO.com. There are a lot of free games listed on this website. POGO.com is a partner of AOL (America Online), which provides a chatting room service that makes players feel like a community.
Recently, EA is trying to expand markets scale to dig more developing opportunities. Under this situation, there is reason to believe that the development prospect of EA is really optimistic.
Trip Hawkins worked in Apple, Inc. before he founded EA in 1982. He was addicted in games so that he decided to create EA to make enough personal computers popularized and so to organize his own players groups. However, when he graduated from Stanford with MBA, his ambitious was to entertain all the players like him. Hawkins also would like to make gamers to earn the same respect, attention and encourage as other media workers'. He hoped that the EA could become such a company to let the game industry be as important as movies, books, and music.
Under the leadership of Trip's idea, the Board of Directors of Electronic Arts, Inc. has adopted a proper management mode.
As stated in EA official website,
1. The Directors have full and free certification to access to officers, employees and the books and records of EA.
2. Any meetings that a director requires to initiate with officers or employees may be arranged by a permission of the CEO, the Corporate Secretary, or directly by the...