Electronic Arts (EA) Stock Rallies as Gaming Giant Attracts $50 Billion Takeover Interest

TLDR

Table of Contents

Electronic Arts stock jumped 14.9% to $193.35 following reports of potential $50 billion takeover talks
Saudi sovereign wealth fund Public Investment Fund and Silver Lake are reportedly in advanced negotiations
The deal could become the largest leveraged buyout in Wall Street history, surpassing TXU Energy’s 2007 record
EA stock is now up 32% year-to-date after the Friday afternoon surge
Company declined to comment on the takeover rumors when contacted by CNBC

Electronic Arts shares rocketed 14.9% higher on Friday, closing at $193.35. The surge came after The Wall Street Journal reported potential takeover discussions worth around $50 billion.

The gaming giant’s stock climbed on heavy trading volume. More shares changed hands than during a typical session.

According to the report, Saudi Arabia’s Public Investment Fund and private equity firm Silver Lake are in advanced talks. An announcement could come as early as next week.

Electronic Arts $EA will be acquired by a consortium of PIF, Silver Lake, and Affinity Partners for $210/share in cash, a 25% premium to its last close.
The $55B transaction, funded with $36B equity and $20B debt, is expected to close in Q1 FY27. Andrew Wilson will remain CEO. pic.twitter.com/DUfDcun3lU
— Wall St Engine (@wallstengine) September 29, 2025

The proposed deal structure suggests a leveraged buyout transaction. This means the acquiring parties would use debt backed by EA’s cash flow to fund the purchase.

If completed, this would break records on Wall Street. The transaction would surpass the previous LBO record set by TXU Energy in 2007.

EA owns some of gaming’s biggest franchises. The company controls The Sims, Madden NFL, and FC series (formerly FIFA).

Stock Performance Tells a Different Story

The stock surge pushes EA’s year-to-date gains to 32%. However, the company had lost 1.6% over the past four weeks before Friday’s jump.

Trading activity spiked well above normal levels. The volume increase suggests institutional interest in the takeover speculation.

CNBC reached out to Electronic Arts for comment. The company declined to provide any statement about the market rumors.

Financial Outlook Remains Challenging

EA’s upcoming quarterly report shows mixed expectations. Analysts expect earnings of $1.29 per share, representing a 40% year-over-year decline.

Revenue projections also point downward. The company is expected to report $1.87 billion in sales, down 10.2% from the same quarter last year.

Recent estimate revisions show some improvement. The consensus earnings estimate has moved 0.9% higher over the past 30 days.

Research shows earnings estimate trends often predict stock movements. Positive revisions typically correlate with price gains.

The stock carries a Zacks Rank of #3, indicating a Hold rating. This neutral stance reflects mixed fundamental indicators.

Other gaming stocks also moved higher. Bally’s closed up 3.3% at $10.79, showing sector-wide momentum.

Bally’s consensus estimate remains unchanged at -$0.72 per share. This represents a 63.8% improvement from the prior year period.

The gaming industry faces headwinds from changing consumer spending patterns. Mobile gaming continues to capture market share from traditional console titles.

EA’s major franchises generate steady cash flow through annual releases. Sports titles like Madden and FC provide predictable revenue streams.

The company also benefits from live service games and microtransactions. These recurring revenue sources help offset declining unit sales.

Silver Lake brings extensive gaming industry experience to the potential deal. The firm has previously invested in gaming and entertainment companies.

Saudi Arabia’s Public Investment Fund has been expanding its gaming investments. The sovereign wealth fund seeks to diversify beyond oil-dependent sectors.

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