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Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerTake-Two Interactive (NASDAQ: TTWO) announced that its ultra-violent game Grand Theft Auto IV took in $500 million in sales in its first week. According to The New York Times "The report exceeded the sales expectations of analysts." It would mean that the company pushed out six million copies." As it turned out, estimates were right on the ball.
The market will say that the numbers will make it harder for larger video-game publisher Electronic Arts (NASDAQ: ERTS) to take over Take-Two. The offer sits at $25.74. The stock trades about $1 less than that.
The problem with Wall Street's view of the offer from EA is that it is not unlike Microsoft (NASDAQ: MSFT)'s bid for Yahoo! (NASDAQ: YHOO). The board at the portal may have viewed it as undervalued, but there are no other buyers. The bid went away and Yahoo!'s shares fell. If EA walks, TTWO shares drop.
Take-Two will tell the world that the Grand Theft Auto IV numbers warrant a higher offer from EA. If the larger company has any sense, it will walk away. That would move TTWO shares back to $17 where they traded before the offer. Management at the smaller company will look like a fool.
Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.
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Reader Comments (Page 1 of 1)
5-07-2008 @ 11:44AM
James said...
Here's my problem with you insight Doug, you don't know what you're talking about.
First off, Take Two's shares were trading at, or around, the $25 in the early fall of 2007. When Take Two announced that they were postponing the release of GTA IV TTWO's shares drop to the $15-17 range. This was always expected to rise above and beyond $25/share.
So when you say that TTwo's shares would drop to $20 per share, all you did was show you readers (if any such people exist other than myself) that you have don't know anything about TTwo share, you only know what you've read recently from other web-news article or blogs, and it also seems that you're asking your boss to fire you (you can't have your head up your ___ at work, the other men might think you're sexually harrassing them).
Take care