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Posted on 12.10.05 by Nikhil @ 12:02 am


NEW YORK - Big news after the markets closed on Dec. 8: Electronic Arts announced it will pay $680 million in cash (or $27 per share) to acquire Jamdat Mobile. In reaction to the news, the stock was up about 18% the next day, trading close to $27 per share. At this level, Jamdat is up 78% from its 52-week low.

I’ve covered Jamdat extensively in Forbes Wireless Stock Watch. In August, the stock price fell 30% on concerns about third-quarter earnings. I urged investors not to be shortsighted and said that the company’s strategic plans were right on target and that Jamdat could become a takeover target.

Well, that’s exactly what happened. As you may know, Los Angeles-based Jamdat Mobile is the premier developer of games for wireless devices. The announcement isn’t a great surprise, given that Electronic Arts, based in Redwood City, Calif., has been trying to increase its presence in this booming market that now has some 5 billion wireless subscribers worldwide. Interesting to note as well is that about 40% of mobile phones are currently game-enabled, a statistic that Warren Jensen, chief financial officer at Electronic Arts, offered at a news conference announcing the deal.

While EA had tried to go it alone, making games for mobile devices requires very different skills than developing games for PCs and videogame consoles. Obviously, the company decided it would do better by turning to an established pro.
Click here to read the rest of this entry on Forbes.com.


Filed under: Stock Watch and Wireless Gaming and News and Mergers/Acquisitions
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I'm Nikhil Hutheesing, and WirelessNik is my personal blog. A senior editor at Forbes, I am also the editor of the newsletter, Forbes Wireless Stock Watch. Here, you'll find my take on the latest breakthroughs in wireless technologies as well as ways to profit from wireless in the stock market.


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