I just wanted to give you folks a quick note – I sold Activision (ATVI) after hours. The guidance just wasn’t strong enough for my liking, even when factoring in the delays of Starcraft 2 and Singularity.
The market’s had a huge run and the stock trades at a significant premium to Take-Two Interactive (TTWO) and THQ (THQI), where I see more upside in the near term. So it made more sense to just dump the stock and take the tax loss now – I don’t want to hope it rallies just when the market seems to be turning down. This move also frees up cash for other trading ideas I’m throwing around.
And a quick update on Perfect World (PWRD) – I sold the August $40 call options against my common stock position. The stock’s been ripping and I’m in a hold mentality – I definitely don’t want to buy it, but I don’t think it’s quite fully valued yet. So if the stock keeps going up, I’ll be forced to sell at about $41.14 – about 11% higher from here. Covered calls don’t always make sense but in this case I believe it’s the best way to play.
The company reports earnings on August 10th and I believe a significant beat is already priced into the stock price – so it could easily sell off in the event of an upside surprise.