GAMELOFT SE The stock plunged in morning trading before recovering to 20.26 euros at 0955 GMT, down 6.4 percent on Tuesday's market close, after banks including Barclays and JPMorgan cut their target prices.
Vivendi had reported lower third-quarter operating earnings late on Tuesday and cautioned that the next two years would require "potentially heavy investments".
While poor numbers had been expected, Barclays analyst Julien Roch said, the "big surprise" came in company comments about problems at its Canal Plus pay-television unit and the bigger, unquantified investment requirement.
"This clearly brings a lot of uncertainty around forecasts for 2016 and 2017," Roch said in a note, cutting his target price for Vivendi shares by 2 percent to 20.50 euros.
Led by Vincent Bollore, chairman and largest shareholder, Vivendi has sold off three telecom businesses in France, Brazil and Morocco, ostensibly to focus on media activities that include the Universal Music Group and Canal Plus.
But the company has also spent 3 billion euros (2 billion pounds) to build stakes in Telecom Italia, video site Dailymotion and video games makers Ubisoft and Gameloft - prompting analysts to suggest that it may revert to what they saw as a sprawling empire lacking strategic coherence.
Under Bollore, Canal Plus is restructuring to overhaul programming and cut costs, with many top executives replaced since the summer.
The quarterly results and investment comments "were a wake-up call on the issues faced by Canal Plus in France", Exane BNP Paribas analyst Charles Bedouelle said.
Reinvestment is the right response to tougher competition from rivals such as web TV operator Netflix, Bedouelle said. "But this will hurt, much more than many expected."
(Reporting by Laurence Frost; Editing by Ruth Pitchford)
