Billionaire buys up 11% of Take-Two

Carl Icahn increases stake in Grand Theft Auto publisher; news of his interest boosts share price more than 11%, sparks speculation of shareholder revolt.

by

When a group of angry shareholders led by Strauss Zelnick overthrew the Take-Two board of directors and installed a new executive team with Zelnick as chairman in March 2007, the publisher's stock was trading for more than $21. Yesterday, Take-Two stock closed at $8.25, and some analysts suspect Zelnick might himself be the target of an investor uprising.

Carl Icahn now controls an 11 percent stake in Take-Two.

Yesterday, billionaire investor Carl Icahn revealed through SEC filings that his companies had acquired more than 11 percent of Take-Two shares in a series of purchases over the last two weeks. After Take-Two preannounced disappointing fourth quarter results after the close of trading on Thursday, December 3, the publisher's stock shed more than 30 percent of its value overnight. Starting the following Monday, Icahn and his partners made dozens of stock purchases (including call options) to obtain their current stake in Take-Two.

Some industry watchers have taken this as a sign that Icahn intends to force a sale or management overhaul of the company. Wedbush analyst Michael Pachter today released a note to investors saying, "We believe that Mr. Icahn intends to force the company to consider a sale." That was a sentiment ThinkEquity analyst Atul Bagga echoed to Reuters. However, Pachter noted that Zelnick and Icahn have a history that may come into play whatever the scenario.

"When Mr. Icahn became Blockbuster's biggest shareholder in 2004, he sought three board seats at that company and nominated himself and Mr. Zelnick for two of them," Pachter said. "Both remain on the Blockbuster board, and we are confident that they know each other well. We think that Mr. Icahn's significant stake in Take-Two will allow him access to Mr. Zelnick, and we expect to see increased interest in the stock as management responds to Mr. Icahn's suggestions about how to unlock value."

Icahn's SEC filing made no mention of further plans to increase his stake in Take-Two, but it did note he might "seek to have conversations with" representatives of the company.

The billionaire's reputation as an activist shareholder is so strong that his very involvement in a stock can boost its value. Icahn first took interest in Take-Two in August of 2006, with the acquisition of just over 1 percent of the company's stock for about $10.82 per share. After the news got out, Take-Two shares ended the next day's trading at $11.56.

Icahn's latest round of Take-Two share purchases seems to be having a similar effect. As of press time, the game company's shares are trading up more than 11 percent to $9.18.

Discussion

142 comments
IRISH_VANDAL
IRISH_VANDAL

thibbledorfP - and how has your theroy stood up against EA? Nuff said.

deviant74
deviant74

all you guys need to know that in 3 years take two will have a stock price of 24$. So start buying it up at 10$. If you like money.

Yazu13
Yazu13

I find it amusing that people who become filthy rich always end up alone. Just look at how many people on here hate this guy for his redundant indulgence and wealth. In all likelihood however, this guy deserves it. Either way, I know I wouldn't want so many people I don't even know hating me. Maybe he should have realized how greedy he was before it was too late to redeem himself.

LinksCarnage
LinksCarnage

All of that money and there are still people starving in the United States. I loathe such overindulgence.

Vambran
Vambran

This old fart prob never played a game in his life.

thibbledorfP
thibbledorfP

Gamers are spoilt for choice right now, so if you want the company to be buoyant again, focus on developing attractive IP's. Gamers are well-informed and word spreads fast, so developing crappy games with a spit-shine polish or LCD marketing won't work for very long.

Jak_Napier
Jak_Napier

11%, thats a big chunk of change.

K_M82
K_M82

here's an idea, let one of the big boys buy take two. EA or Activision would do well buying this company. less competition better is always for gamer yaaayyy (sarcasm)

XenoLair
XenoLair

wow, single handedly taking over a company xD

Barhooom
Barhooom

@ MERGATROYDER 200 bucks will make you a proud owner of 0.000000261% of Take Two

sanechupp
sanechupp

They shouldn't let the retard buy any of it or any one else. Mr. Pakter has a little Porsche.

coolasj19
coolasj19

woah. i didnt know there were people who singlehandedly took over companies -_-

MERGATROYDER
MERGATROYDER

Hey Carl, I got some ideas you may be interested in. Clearly TTWO hasn't been having any luck with the ones they have come up with. Who am I to judge an amazing company? I would jump on-board and buy a piece of the company as well if I had the funds. Will you take 200 bucks?

StJimmy15
StJimmy15

Oh geez... Heres hopin this doesn't affect the GTA franchise in any way.

jiggyteddy
jiggyteddy

This is all legal when you are a publicly traded company. When you go public, I hope you took these risks into account because you can't be a crybaby about it after the fact. Good luck TTWO.

2bitSmOkEy
2bitSmOkEy

Well if there ever was a company that I would not have to worry about selling out, it would be good old Rock *. Just read some interviews with the Houser brothers (writer/creator of the gta series), they are straight up gamers and obviously dislike corporate dbags just as much as the rest of us. I mean come on, just soak in all that satire that they love to unload through Grand Theft Auto. These aren't the type of people to sacrifice integrity to make an extra buck.

gshell
gshell

OMG! you know what carl ichan does nothing to make companies better....all he does is find ways to take ownership so he can start cutting up and dicing up a company to recoup his investment. he's corporate raider that's it....he's not a video game guy at all.

green_dominator
green_dominator

Watch for Take Two to fall in 2010, This action doesn't sound too good for the company. Take Two was already hurt by EA's attempted takeover and now their shareholders might finish the job EA started......Who's to say they aren't working with EA? Take Two is one of the last relatively Independent developers left, it would be a shame to see them bought and sold to a company that will gut them all in the name of stealing GTA...... I certain;y wouldn't trust anything they did unless they remain what they are, I'm sick of people and companies in strong positions being robbed of the things that make them great......

lletheri
lletheri

11% will most likely be a plurality. I doubt anyone other individual holds so much sway. In business, that puts you as a large shareholder.

SadPSPAddict
SadPSPAddict

Be interesting to see how he influences things.

zeniftan
zeniftan

At least it's only 11% instead of 51%. This way he has a strong presence when he has something to say in board meeting's. But he won't be the MAIN deciding factor on decisions that the board has to make. :-)

great_grandad
great_grandad

You've got admit that take-two does have a lot of potential especially if they can get another franchise with half the appeal of GTA. I think he does right the share price is undervalued and they are worth investing in if you have money spare. As for the games the more the shares are worth, the more money the company has access to for games development.

ebookerd1
ebookerd1

I think we are going to get screwed on this one. Everytime a millionare gets involved with games and isn't a gamer. The company goes belly up

tatu2004
tatu2004

2010 should be a good year for Take Two R* Games has a great line up hopefully Bully 2 will be in the summer..

cloudy14
cloudy14

Who cares to be honest..... as long as Take Two keep making good games.

gary234
gary234

I got a bad feeling something ain't right here.This maybe EA's way of finally getting it's little hands on Take Two.

geoff-uk123
geoff-uk123

I just hope Take Two will still do well.

Qirexian
Qirexian

It's not about having someone to blame, cause even we do have someone to blame, there's barely ever any point in it. What really is important is not the person that makes a certain financial move, but how the move itself influences a company or even the entire industry.

exiledsnake
exiledsnake

No bearing whatsoever? Games are financed by these people. If they want, they can make take-two into a casual trash churner just for the money. If gamespot didnt report on this, we wont know who to blame.

vassago_
vassago_

@Col-Struckin - Boring? This is how the game industry thrives. Investors, buyouts, trades - it all leads to new companies and funding for the games you play. You can't truly appreciate a hamburger until you've slaughtered your own cow. Just sitting there clueless about the industry base, you really take your entertainment for granted. It's not as easy as you may think.

endocrine
endocrine

And we all know how well blockbuster is doing........ Bye bye TT.

MooseMcDowell
MooseMcDowell

Icahn isn't the kind of guy who flips companies. He's going to stick with it until it either turns an even bigger profit or the stockholders kick him out. A good thing for take two.

Oracleas
Oracleas

HiroArka: because it´s the new entertainment medium.. hollywood lost to videogames, and now it´s the coolest thing to invest in.. more than any other tech stocks

jinzo9988
jinzo9988

I bet Carl Icahn will sell to Activision. Hell, I wouldn't be surprised if Activision set him up to do it.

halo4xbox720
halo4xbox720

I just hope this speeds up the reveal of the next GTA.

HiroArka
HiroArka

"Mikethechimp Posted Dec 19, 2009 8:03 pm PT Why is the video gaming industry these days so emphasized on $$$?" Because without money they can't pay their staff or the bills of their establishment. It cost some serious dollars and cents to run a business.

FoxbatAlpha
FoxbatAlpha

I was going to buy 15% of shares but decided to play Tetris on the original NIntendo.

onthe_dl
onthe_dl

i just bought some shares in take 2, this is great news

MadGamer132
MadGamer132

revolt? what are talking about? revolt?

D4NZEL-709
D4NZEL-709

I would do that to get games early :P

akiwak
akiwak

Because the world revolves around MONEY!!!!

SauhlGood
SauhlGood

wow well take-two isnt earning much as of late...either he know somthin we dont or he luvs video games alot...somehow the latter strikes me out of character.

humado
humado

its all about the MONEY!!!

Wolf3037
Wolf3037

Maybe he's going for a hostile takeover? Or maybe that old man games it up hardcore every night. I can definitely see him screaming into the mic. Yup...