Insiders of Activision Blizzard Inc. (ATVI, Financial) sold 9,000,996 shares as a result of the options expiring this year.
Director Brian Kelly sold 5,037,998 shares of the company on Feb.14 and Robert Kotick, president and CEO, sold 3,962,998 shares on Feb. 10, according to SEC filings.
It is important to note the sales were triggered by a predetermined sales price and the options were not eligible for an extension due to expiring in 2017. Net proceeds from the transaction were approximately $61.7 million. Kotick still holds nearly half a billion dollars worth of Activision Blizzard shares.
Activision Blizzard is a video game publisher for online games, personal computers, video game consoles, tablets and handheld and mobile devices.
Activision Blizzard recently acquired King Digital, the maker of Candy Crush, for $5.9 billion. The company also creates games that operate on Microsoft Corp.'s (MSFT, Financial) Xbox One and Xbox 360, Nintendo Co. Ltd.'s (TSE:7974, Financial) Wii U and Wii and Sony Corp.'s (SNE, Financial) PlayStation 4 and PlayStation 3 console systems, PC, the Nintendo 3DS, Nintendo Dual Screen and Sony PlayStation Vita handheld game systems, and other handheld and mobile devices.
Activision Blizzard has a market cap of $33.8 billion, a price-earnings (P/E) ratio of 37.6, an enterprise value of $35.5 billion and a price-book (P/B) ratio of 3.7.
According to GuruFocus, Activision Blizzard has a 6 out of 10 financial strength rating with a cash-debt ratio of 0.66. The equity-asset ratio is 0.52. The Beneish M-score of -2.69 indicates the company is not a manipulator of its financial statements.
Activision Blizzard has an 8 out of 10 profitability and growth rating with an operating margin of 21.37%, a net margin of 13.86%, a return on equity (ROE) of 10.63%, three-year revenue growth of 25.60% and three-year EBITDA growth of 27.70%.
The company’s stock price soared after the company recently released better-than-expected and record-setting financial results for the most recent quarter.
For the quarter ended Dec. 31, 2016, Activision Blizzard’s generally accepted accounting principles net revenues were at an all-time record of $2.01 billion. This is a 49% increase from $1.35 billion in fourth-quarter 2015.
The company’s GAAP net revenues from digital channels were an all-time record of $1.45 billion, growing 101% year over year. The GAAP operating margin for the quarter was 21%.The non-GAAP operating margin was a record 34%.
GAAP earnings per diluted share were 33 cents, up 57% from 21 cents in the prior-year quarter.Â
On a non-GAAP basis, the earnings per diluted share were an all-time record of 65 cents, a 160% increase from 25 cents in the same quarter a year before.
Activision Blizzard also increased its gross profit by $199 million and its net income by $55 million from the previous quarter.
The stellar report caused the company's market price to soar approximately 20% on Feb. 10.
Below is a Peter Lynch chart that shows Activision Blizzard is trading above its intrinsic value.
Disclosure: Author does not own any shares of this company.
Start a free 7-day trial of Premium Membership to GuruFocus.
