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Take-Two Interactive (TTWO), whose competitors in the video-game industry include Activision Blizzard (ATVI) and Electronic Arts (ERTS), is doing good business with its Red Dead Redemption title. But is that enough to make you want to buy the stock?
According to the AP, the game sold 1.5 million copies in the month of May. That's relatively impressive, but it unfortunately did not meet the expectations of Michael Pachter, who is an analyst for Wedbush Morgan. He was thinking 1.8 million copies was doable. Even so, you have to hand it to management for a robust launch.
The cited article mentioned how shares of Take-Two were up over 2% at the time of its writing. Well, right now, with a little over two hours to go before the market closes for the weekend, the stock is up about 1.4%.
I wouldn't make too much of the price action today. Volume isn't that active, so there's not a high quantity of conviction implied in the trade. This is the Friday before the long weekend, we must remember, so equities don't have all of Wall Street's potential attention at the moment.
Still, on a down day, the fact that the stock is in the green might count for something. It's currently up a dime to $8.95. The 52-week high for the shares is $12.57, and the 52-week low is $7.
Nevertheless, I see no reason to buy this afternoon. The sales of Red Dead Redemption are cool, but they aren't cool enough to make me want to take a risk on the publisher. With the video-game industry facing problems with growth, I'd look at Take-Two if it drops down to the 52-week low, or if the price action suddenly firms up.
Disclosure: I don't own any company mentioned; positions can change without notice.
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