Take-Two shares wobbly post-GTAIV launch

Uncertainty over buyout leads analyst to downgrade stock; company chairman claims vindication at critical, commercial response to Rockstar's latest.

From the day Electronic Arts first went public with its bid to buy Take-Two Interactive, the takeover target and owner of Grand Theft Auto IV publisher Rockstar Games has been consistent with its response. Take-Two chairman Strauss Zelnick reiterated the opinion that EA's original $26 per share offer undervalued the company's worth when rejecting said offer during a shareholders' meeting last month. However, he also said the Take-Two board would be open to entering discussions after GTAIV went on sale April 29.

GTAIV came out this week to critical acclaim and record-setting sales, prompting Zelnick to tell the New York Times in a statement that the reaction to the game "vindicates our strategy of waiting until the launch with regard to EA's offer." On the day of the game's release, Take-Two stock nudged upward $.16 to close at $26.63.

That gain was quickly wiped out as Wednesday trading saw the stock fall to $26.24, and this morning it suffered another hit as Kaufman Brothers analyst Todd Mitchell downgraded the stock from "Buy" to "Hold." According to a Reuters report, Mitchell lowered his assessment on the belief that EA was ready to play hardball and even walk away from the Take-Two deal entirely if its current offer of $25.74 per share (lowered to compensate for a Take-Two poison pill provision) was not accepted.

Mitchell reportedly told investors that he expected a maximum sale price of $28-$30 for Take-Two shares, and didn't feel the potential reward outweighed the risk of EA pulling its offer from the table. If EA walked away from Take-Two now, Mitchell suggested the Rockstar parent company's share price could sink by as much as $7.

Take-Two shares closed today's trading down $.15 to $26.09.

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Discussion

140 comments
tojo12
tojo12

Sell jackasses! Maybe EA could've released GTAIV without all the damn bugs! You should be ashamed of yourselves for putting this game out in this state. It has potential, but if I can only play for 4 minutes before freezing, that's a load of crap.

zaptoman
zaptoman

Don't do it Take-Two! Don't sell out! We need a company that ISN'T EA out there!!

Citan76
Citan76

@ Jmartin, I doubt it after this whole fiasco. Likely they would get rid of all the executives and take all the sports employees they could hire and fire the rest. They will probably keep Rockstar and maybe the Bioshock guys somewhat independent. The rest I doubt will retain any autonomy.

jmartin1016
jmartin1016

EA is the devil. I hope for the sake of future gamers that T2 is able to operate independently from EA.

effthat
effthat

Please take the time to study mergers and acquisitions before you make posts like, "DON'T SELL OUT T2!". The board is making bad choices and the stockholders are suffering for it. Not only that, but the owners of T2 (That's right! A big money grubbing corporation already owns them!) could take some serious hits, because of T2 decision. For those of you who don't know, selling stock is one of the most common ways that existing business raise funds to take on big projects. So this hurts T2 and the consumers and the stockholders and only really helps the board of directors who are already fat and happy, but figured they had brainwashed the public into buying three copies of GTA4 so they decided to hold out for more money. Aren't you glad that T2 stuck it to the man?!

zombey1333
zombey1333

Man, I hope they don't give in to EA. They're good on their own, they don't need to be part of a company full of mediocre junk.

GeigerdolylWodd
GeigerdolylWodd

Online Multiplayerwise? This is what Saints Row' should have been like. Team Deathmatch in particular having the whole city at your disposal, the other NPCs driving their cars or walking, the police present (if the option's turned on), and no mysterious warping...

-Raiden-
-Raiden-

yes, its nice to see EA down:-)

Dryker
Dryker

Never having caught the GTA bug, I bought this game strictly over the hype and generally positive consensus. I am glad I did. This is one of the most amazing gaming experiences I have ever had. It is a collection of so many finely tuned and honed tidbits that culminates into a completely immersive and ultimately gratifying experience. An experience I truly feel would suffer at the hands of EA, even if they had all the best intentions. They're TOO big and have too many outside forces affecting their decisions. The first change would definitely be to tone-down the sexuality, language, and drug use and that would be a crime. I choose not to behave the way that is allowed in GTA, but I respect its actuality nonetheless and the novelty of its experience.

Impostorzim
Impostorzim

I don't expect stock prices to go down. I thought they mentioned a few weeks ago that it would rocket up to $30! I really don't understand these things very well, I just really wanna play GTAIV already.

brain20035
brain20035

I personally will wait for the PC version of the GTA IV since I don't have any consoles!!

robertino007
robertino007

My biggest mistake was to pay Rockstar 60 beautiful dollars insted of Blockbuster 6.

sphinx-shadow
sphinx-shadow

we just have to wait and see i am just done guessing.

SalarianChemist
SalarianChemist

Grand Theft Auto 4 really has failed to live up to the sales up, because consumers are intelligent--they don't want to risk buying defective software, especially if it is going to be recalled in certain areas. I know I'm going to listen to the news, and I'm going to wait to buy Grand Theft Auto 4 until all the bugs and glitches and other problems have been solved. If I feel a need to play it, I will just rent it on the weekend, which might even save me $60 since I won't need to buy the game afterwards.

otanikun
otanikun

The whole point is to not sell out to the Bully *insert lulz here* whom call themselves EA Games. Quite honestly I think Take-Two is making great moves to prevent it's self from burning up in flames, to actually take EA's offer into consideration for a minute would cause them to end up dead in the water like so many other game companies that sold their souls to a higher cause just to stay alfoat. Take-Two is higher than this and a gimpy 2B dollars isn't enough for this great company, I'd say aim higher, but then I'd have to send angry letters to EA for several years until they tell me to shove off or something. On a different note, since I heard the news of the proposed take over, I have committed myself to never buy another EA game for as long as I live, what does a franchise such as them want with TT or Rockstar Games anyway? I know EA pretty much destroys all it see's with it's Midas touch, but they haven't said anything about their other games; like Midnight Club, BioShock etc... Lets ride the waves of success on a game we had nothing to do with; was EA's mentality, well bullocks to you EA, pure unadulterated bullocks.

kaziechameleon
kaziechameleon

this is bull, why build a great company like that only to sell out. this is bad for consumers.

iwilson1296
iwilson1296

acurev, would you rather take-two keep making the games the way they have been ( which has been getting better with every new installment), or have EA buy them out only to run the gta series into the ground the way they do?

Acurev
Acurev

Take Two is full of themselves! To say "Were not worth that! HA!" To say that to EA is just stupid...GTA games are pretty fun (not perfect but fun) they cant keep making them forever and pretty soon the formula that shot them to the top will crush them...

seeddrmmr
seeddrmmr

Ha....I hope T2 holds out....and their stock drops to s***. Bash EA all you want, we all own their games.

skyline7284
skyline7284

The Take Two Execs are whining liek little babies, just end this stupid thing already so sick fo hearing about it

BigSmitts07
BigSmitts07

this just goes in circles....its like theyre married....will it ever end?

ColdfireTrilogy
ColdfireTrilogy

Man this is ridiculous, just do something im sick of hearing about this its about as annoying as seeing Mrs. Spears on every mag cover for 3 years .....

BigDoherz
BigDoherz

Publishing wise EA does a good job with some games. However whenever they get any input on game development the game usually sucks.

LindBergh2007
LindBergh2007

This is exactly why SEGA should be the company that buys Take 2. They deserve it more then anyone else.

hooligan_apex
hooligan_apex

GOOD. I hope your shares tank even more, Take Two. I'ts your own phucking fault for releasing what could have been game of the year, but turned out to be a crashing pile of nonsense. We are not your beta-testers!!

agni_1
agni_1

I hope to god that they don't sell the company

kos1085
kos1085

I dont think take two will be able to outlast the EA empire for too much longer even with GTA sales.

ps3thabest
ps3thabest

damn ea if they buy T2 max payne would be done for

mysterylobster
mysterylobster

"If ea buys T2 won't be long before we see gta wii." Then I hope they buy them ASAP.

d3vilg0d
d3vilg0d

from a business perspective it is hell of a deal for both parties,long term for EA and good price for take2 but from a gamers perspective don't sell because we will get screwed. Then agen EA does publish Valve,Crytek,Bioware and pandemic.

Nineball2112
Nineball2112

Well, at least one analyst believes that it won't get any better (in the near term) for TT since he is suggesting a "Hold" strategy rather than a "Buy" strategy. I also agree with Markharris... "The EA deal is the best offer out there for T2, and if you are a shareholder I would highly recommend you encourage T2 to sell." And depending on how widespread this freezing glitch is, and how it affects sales until it is fixed, the share price might drop even further. From a business standpoint, the TT shareholders ought to be concerned about the board of directors decision to not take EA's offer. This is an interesting case study in acquisitions!

skrutop
skrutop

I'm with you markharris31. The stock was inflated to EA's buy-out price when the offer was made. GTAIV's already been factored into their $26 price. This stock isn't going anywhere.

jknight5422
jknight5422

I've always thought that a game company going public is one of the stupidest things it can do. I don't think Take-Two should sell to the EA Borg. We don't need a monopoly running video game publishing, design, & manufacturing.

markharris31
markharris31

The ignorance on these boards makes me sad. I've been saying this all along (and I have seen some of you others making note of it) that T2 shares were artificially inflated by the EA offer. That is the reason they aren't going up since the GTA release. Honestly, when you value the company as a whole, not just Rockstar, the actual share price, even after GTA, would still be down somewhere close to $20 per share. The EA deal is the best offer out there for T2, and if you are a shareholder I would highly recommend you encourage T2 to sell.

peeweeshift
peeweeshift

there stock was artificially boosted due to ea helping it

Peltz999
Peltz999

To d3vilg0d: Dont assume that if a game doesnt use the latest "uber mega devastator" engine it cant be fun. The best of games are a perfect mix of everything from graphics to story.

lord-of-gamers
lord-of-gamers

diablobasher because the people buying T2 shares want EA to buy the shares from them but at a higher price than what they payed for - its about making money - and if EA backs away - then people will sell the shares because the offer is gone - and when shares are sold - their value decreases

d3vilg0d
d3vilg0d

If ea buys T2 won't be long before we see gta wii.The name it self shud see it sell over million but the quality of the game will be an entirely different issue all together.

diablobasher
diablobasher

What a load of rubbish, i dont see why EA's offer should be affecting share prices at all, even if EA walks away Take 2 is still a very profitable company with a lot of good franchises, and some great new ones on the way this year.

tyzwain
tyzwain

@santiagochile: Sure...and then put Mario on the PS3...because you know he'll look much better in 720 ;)

SomeFreakyGuy
SomeFreakyGuy

I have no real problem with big buisness stuff. At the end of the day it is in the hands of the owners of the company. I do however have a problem with EA who have a habit of beasting fantastic companies and forcing them to release mediocre sequels. I still have not forgiven them for destroying Oddworld.

Richmaester6907
Richmaester6907

GTA Wii haha oh right you were being serious LMAO!!!!!!

cdx00
cdx00

@santiagochile, Right.

santiagochile
santiagochile

"Wow nice work EA you messed up T2's share right after they release such an amazing game. I really hate EA buying all these great game companies." Great company?! Where is GTA Wii?? Where is Midnight Club Wii?? Screw Rockstar! EA should buy them asap and start making some decent games for the Wii, the #1 console.