UPDATE: Deutsche Bank Downgrades Shanda Games to Hold on Weakening Earnings Visibility

Deutsche Bank lowers its rating on Shanda Games

from Buy to Hold and lowers its price target from $6.41 to $4.60. Deutsche Bank notes, "Shanda Games plans to launch major expansion packs (EP) of its legacy games (Mir 2 and Woool) in 3Q12. The co guides a weak 15-20% sequential top-line decline for 2Q12 as monetization of the two games (50% of rev in 1Q12) slows. We view EP as only a partial remedy for usage loss. Earnings visibility over the next 12 months decreases on declining usage and major updates. In addition, we view recent expansion in value of related party transactions with parentco Shanda Interactive as introducing possible conflicts between parentco and public (minority) investors." GAME closed at $3.95 on Tuesday.