purplebean

Could be worse

[purplebean @purplebean]

@chloegkennedy They gave $60B to shareholders and put it on a credit card with $2B/year repayments that sucked up all their cash flow.

So they said "no" to artsy games and "yes" to Sims DLC and EA Sports.

[purplebean @purplebean]

@SloMoBackSlap I don't think it's that complicated. The company is now a private equity scrapheap. They are now a machine that turns The Sims DLC and EA Sports games into debt repayments for bondholders.

[purplebean @purplebean]

@IGN Your article states precisely the opposite of your tweet by the way.

[purplebean @purplebean]

@IGN How would they be "doomed"? Before buyout EA had a $2B annual FCF. That all got sucked up by their buyout debt, and not surprisingly that's exactly when they announced their $700M/yr cuts that killed Bioware.

Giving shareholders a $60B free bag tends to affect your financials.

[purplebean @purplebean]

@LouEaglesham Their debt from the buyout ($20B, with an annual repayment that sucked up almost all their pre-buyout cash flow) is tied to their assets, including presumably their IP, so they may not legally even allowed to sell that IP that simply.

[purplebean @purplebean]

@towelthetank VENOMSTONES ACQUIRED: 29

[purplebean @purplebean]

@_Starkilla @Mike_from_PA Yea you were a real blue collar Joe just trying to put food on your kids table

[purplebean @purplebean]

@unusual_whales “Autonomous”

[purplebean @purplebean]

@erikkain Here's a coherent argument: EA gave $60B to shareholders in a leveraged buyout that wiped out their previously-healthy free cash flow and forced cost cuts that killed Bioware.

[purplebean @purplebean]

@neeratanden "(since AES specifically told Ezra Klein he would phase in coverage by group which by definition means he’s not auto enrolling everyone)."

That in fact does mean just that.

[purplebean @purplebean]

@ChronoKatie EA with PE firm underwent a $60B (given to shareholders) leveraged buyout. To pay for it they took on $20B in debt. That debt wiped out their free cash flow and forced $700M/yr in cuts. Those cuts = Bioware.

https://t.co/y96fRtSBf3

[purplebean @purplebean]

@ChargerComic @avilewis EA had an annual free cash flow of $2B before they took on $20B debt for the cashout that they gave to shareholders. That all went away in the buyout.

They were doing fine. It was the $60B buyout that killed Bioware, what's left is Sims DLC and EA Sports roster updates.

[purplebean @purplebean]

@Nerr0x @Seramurai_ @ChristinaTasty No, it was the $20B in debt they took on in the leveraged buyout. Their free cash flow went from $2B to 0 and they were forced to announce $700M/yr cost cuts. We now know what those cuts meant (all of this to give shareholders $60B by the way). https://t.co/y96fRtSBf3

[purplebean @purplebean]

@Marky_X_ That's like a quarter of EA's annual free cash flow (before they gave their shareholders $60B after which it went to 0).

[purplebean @purplebean]

@kalina_chung None of this even matters ironically. What killed Bioware was the $20B in debt that EA took on in the leveraged buyout.

$2B/yr in debt repayments prompted them to announce $700M/yr in cost cuts.

Before the buyout they had an annual free cash flow of $2B and it went to zero.

[purplebean @purplebean]

@Trutown EA also has much of their assets (including IP I assume) tied up as collateral for the $20B of debt they just took on for no reason, so selling it might be legally more complicated than normally.

[purplebean @purplebean]

@Cyael Actually how it died was EA took on $20B debt so that shareholders could cash out with a $60B leveraged buyout which zerod out their previously healthy free cash flow.

[purplebean @purplebean]

@PyromancerYT I think revealing Zereth Mortis and the First Ones was a bigger problem

[purplebean @purplebean]

@ChrisMurphyCT W

[purplebean @purplebean]

@IGN It's too bad they instead chose to give shareholders $60B and go back to churning out Sims DLC and EA Sports roster updates.