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We’re No. 1! We’re No. 1! Oops

Electronic Arts (EA) just pulled off a feat it would have rather not: For the second straight year it has been voted Worst Company in America in the Consumerist website’s annual vent-fest that pits 32 companies that have most annoyed the real folk most over the past 12 months in a single-elimination bracket competition.

Electronic Arts is the first repeat winner since the subsidiary of Consumer Reports launched the competition in 2006. Apparently hell hath no fury like a gamer fed up with buggy games, crappy customer service and a revenue growth strategy focused on constant upsells to get customers to pay for microtransactions.

Electronic Arts whupped Bank of America (BAC) by nearly a 4:1 margin in the final round of voting. Comcast (CMCSA) came in third after beating TicketMaster, a subsidiary of Live Nation Entertainment (LYV), in the consolation round.

The win/loss does not bode well for Electronics Art shareholders. As YCharts explained in a previous post, losers have a decided habit of trailing the market badly in the 12 months after being crowned WCIA.

As seen in a stock chart, Electronic Arts had been in rally mode up until the SimCity server debacle in early March.

EA Chart

EA data by YCharts

Since then the stock is down 6%, compared to a 2% rise for the market, as represented by the S&P 500. Seem like small potatoes? Well, that big rally is more a dead-cat bounce when you zoom out to a longer time frame as show in this chart:

EA Chart

EA data by YCharts

YCharts’ proprietary valuation analysis, available to Pro subscribers, currently rates Electronic Arts “Avoid.”

Electronic Arts COO Peter Moore questioned the perspective of voters putting their gaming ire ahead of outrages that pack far more consequence (see: Bank of America and its roie in the foreclosure doc /workout debacle). But he conceded that “We can do better. We will do better.” Shareholders sure hope so.

Carla Fried, a senior contributing editor at ycharts.com, has covered investing for more than 25 years. Her work appears in The New York Times, Bloomberg.com and Money Magazine. She can be reached at editor@ycharts.com.

Read more articles about: Company Analysis  

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