here.)
Vivendi SA (EPA:VIV) and SFR have responded by trying to cut costs, specifically announcing plans to close 150 of SFR’s 850 total stores. Vivendi is also pursuing several strategic alternatives, such as a merger with Iliad (unlikely to pass regulatory scrutiny) or Numericable.
We estimate that SFR is worth approximately EUR 15.0B. For a more detailed discussion of how we arrived at that value, please see the valuation discussion at the end of this article.
Activision Blizzard (“ATVI”)
Activision Blizzard is one of Vivendi’s most valuable assets. Activision Blizzard, Inc. (NASDAQ:ATVI) is publicly traded under the ticker symbol “ATVI.” Vivendi SA (EPA:VIV) owns 61 percent of the company. If you are an adherent to modern portfolio theory (a.k.a. the market is always right and reflects all available information), then valuing the company is as straight forward as taking 61 percent of the company’s current market cap of $15.84B. Of course, I’d also recommend you read this excellent blog post by Mark Cuban to disabuse you of the notion that the stock market is in any way efficient or rational. (I also want to highlight how Mark Cuban chose a young investment advisor and had a good experience with him.)
The problem with valuing video game companies like Activision is that they need to continually reinvent themselves. The videogames that are popular now won’t be in the future. One wrong move and a “triple A” franchise like World of Warcraft can crash and burn. A company such as The Coca-Cola Company (NYSE:KO) does not face the same pressure of constant evolution. Even other software companies such as Microsoft do not face as much
