Prof G Markets EA Goes Private for $55B in Biggest LBO Ever, U.S. TikTok Valued at $14B & GDP Revised Upward
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Sep 30, 2025 
Michael Pachter, a leading video-game industry analyst from Wedbush Securities, explores the $55 billion deal to take Electronic Arts private, discussing Saudi Arabia's strategic interest in gaming and potential growth via mobile platforms. Mark Zandi, Chief Economist at Moody’s Analytics, analyzes the upward revision of GDP, driven largely by the wealthy, and highlights concerns about recession risks due to stock market dynamics. The discussion also touches on the dubious $14 billion valuation of TikTok in the U.S. and the legal ramifications surrounding it.
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EA Goes Private In Massive LBO
- Electronic Arts is being taken private in a $55B leveraged buyout funded mainly by debt.
- The LBO lets investors rework monetization without public-market scrutiny to extract more cash flow.
Saudi Strategy: Jobs And Gaming IP
- Michael Pachter explains Saudi Arabia's strategic interest in gaming as economic diversification and job creation.
- He says the Saudis want to build an entertainment industry and see EA as a platform to expand into mobile and create jobs in-country.
How Saudis Could Justify The Price
- Pachter notes the deal values EA at about 26x free cash flow, implying a low 4% yield and heavy reliance on operational gains.
- He argues mobile expansion and making Ultimate Team free-to-play could plausibly double cash flow to justify the price.
