Wall Street lines gutter with game stocks

EA, Atari wake up to an E3 hangover; Madden maker sinks to 52-week low, and it's still too pricey for one high-profile stock picker.

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Electronic Arts at 43 bucks and change. Is it a bargain worth buying or a stock to avoid?

As recently as three weeks ago, shares in Electronic Arts were trading above $57. But the industry's biggest publisher woke up two business days after the Electronic Entertainment Expo to one of the nastier hangovers on Wall Street. Hitting a 52-week low and closing at $43.28 today, ERTS is the most noteworthy of game stocks that have generally flopped over the course of the last few weeks.

Activision also suffered through the past week, which must have smarted that much worse given the jolt investors gave its share price the week before. Then, investors were reacting favorably to news that the publisher had picked up the James Bond license from EA. The day after the news was announced, Activision shares hit a high of $15.11 in intra-day trading. Today, the stock lost pennies to close at $13.22.

Take-Two also showed the blemishes of a tough month--the stock closed above $17 May 1. Today, shares of the company barely made it above $15.

So is Electronic Arts, at a 52-week low, right for buying? The Street's James Cramer thought no, advising a caller on his radio program yesterday that the company's slowing growth rate makes it an expensive stock, even at $43.

Checking in with a different perspective is Wedbush Morgan analyst Michael Pachter who sees potential in the stock. "There's just a lot of pessimism about the cycle," Pachter told GameSpot. "Nobody is saying anything good right now."

Is he a buyer of the suddenly slumbering Electronic Arts? "I would be a buyer here," Pachter said. Elaborating further, he predicted the stock would hit 60 within the next year.

Rounding out the day was Atari, off 3 cents to $.71, Midway was up 2 cents to $9.62, THQ was off 7 cents to $23.08, and Take-Two was off 8 cents to $15.02.

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