Take-Two Stock Rebounds

September 28, 2006 -

GamePolitics has run a number of stories over the past 15 months tracking the steady decline of Take-Two's stock price in the wake of the Hot Coffee. TTWO had a pre-scandal near 28, but has been as low as 9 in recent times.

Business site MarketWatch, however, reports that TTWO is rebounding, despite new concerns about ongoing investigations by the SEC and the Manhattan District Attorney's office. There are also a number of shareholder suits pending as well as the controversy surrounding the October 17th release of Bully.

With the stock price now in the mid-teens, MarketWatch cites the strength of the Grand Theft Auto franchise as a factor in TTWO's rally.

"We view it as a company that has had some problems. But, (Take-Two) has been disproportionately punished," said Emmanuel Ferreira of the Oppenheimer Quest Opportunity Value Fund. Ferreira told MarketWatch Take-Two has no debt, possesses a talented development team and has high liquidity.
 


"I think the worse they do, the more people believe it will be bought out," said Michael Pachter, an analyst who tracks the video sector for Wedbush-Morgan. "They can make a couple of dollars a share every time they bring out a new version of Grand Theft Auto. That will put a floor on the stock."

 

 


Comments

Hmm, interesting news, but, not exactly world ending type stuff yet. When Bully comes out and is a major hit cause of all the free press, well, I can't help but think that there stock would soar then.

It's be the ultimate sorta "HA HA" in jack thompson and all the other critcs faces if that happened.

BTW, Dennis, about the school shooting in colarado, any word from that, i have a sneak suspecion someone witll play the "Game card" on it shortly.
"My name is Lenerd Church, and you will fear my LASER FACE"

Bah, the Colorado thing is not game related, the guy was BEARED. I personally blame terrorists since they usually have beards.

Anyways, it's good to know TTWO is on the re-bound, I think it will rise even higher when Bully sells well and leaves people aghast at the non-violence of it all. Also, I bet they used the flower gathering mechanic I predicted!

Yuki, they'll try, but the fact that the man was between 30 and 50 years old will tear that card to shreds.

Take-Two's stock is slowly coming back, so when Bully comes out and is successful, the stock will continue to go up.

I never did bother looking at the 10K of these companies before, but that tidbit about having no debt is pretty interesting. Not only does this allow the company to maintain more of it's revenue than if it had to disperse through debt, it also means it's a company that can get debt and be a good thing; such as expansion, new studio, creatind seperate funds for different types of money making ventures. I find it interesting that none of the other doomsday reports mentioned this and can only imagine that A) other reports did mention it and I glossed over it or B) this no-debt policy is something that is common among the videogame entities, or C) they didn't want to hurt their analysis by putting something in that would be contrary to their report.

"...disproportionately punished..."

My FAVORITE line of the whole bit.

Yes, it's true.
By the media. By organizations. By individuals. Even by the government.

There are a number of companies who received those NASDAQ notices. Including EA. But who gets the brunt? Take Two.

As rediculous as the NM Posey case is, Take Two is named because of GTA. Yet, as others have pointed out, another video game was mentioned, but the publisher/maker of that game was NOT included in the alawsuit.

There are a large number of companies who make a variety of violent video games. But who gets mentioned every single time there is a hearing in a government commitee? Take Two or one of its subsidiaries.

Sometimes, I think there is a deeper hidden agenda other than the "violent video games are bad" when it comes to Take Two. Almost like they "dissed" someone and now that person, organization, or the government is out to "get them" specifically, but not for the publicized reasons. I definitely believe that of the Tyndall House/Left Behind issue. And it wouldn't surprise me if it were the same with Take Two.

nightwng2000
NW2K Software

@Yuki

"It’s be the ultimate sorta “HA HA” in jack thompson and all the other critcs faces if that happened."

Oh you just know he'll see that as merely a challenge. Give him a few days, he'll be lurking round schools just waiting for someone to do anything that the game does...blissfully ignoring how often that stuff is done in school anyway.

The ironic thing is that no matter what happens to "Take Star", the GTA franchise will still be going. If the entire company goes belly-up, all of their IP will be sold or auctioned off a 'la Acclaim. Some other publisher will pick it up and continue to milk the GTA name and design style.

Unless Jack & Friends are able to defeat the Bill of Rights, GTA will be around long after we are gone...and that's a good thing.

Quick - buy T2 stock!

Aniki: I did. I bought around a thousand dollars worth when the stock was down to roughly ten bucks a share.

I'm pretty happy right now.

If I had a spare £1k a few months ago when T2's stock was down to it's lowest point, I would have bought into it without hesitation. Even considered clueing my dad in on it as he has been known to pay attention to my suggestions before.

Shame I didn't in the end, I suppose its still not too late to have a go.

@ Yukimura

Unlikely, that Colorado gunman was 30-50 yrs old. Unless the plan is to blame Pac-man.

My thoughts and feelings go out to the parents of that poor girl that bastard shot. Death was too good for him.

Nice to see Take Two having some luck after the beating their barriers havetaken. I bet Jacky is happy right now, but he'll never let us know.

Damn maybe I should of bought stock when it was down like I was planning too. Oh well, not like I had a lot of money to spend at that time anyway.

“They can make a couple of dollars a share every time they bring out a new version of Grand Theft Auto.”

And ideas like those are one of the things hurting the game industry very much. It seems like people making the money decisions for games really have to think about the law of diminishing returns a little more.

@ joystickgenie: Yep. That's part of why the Tomb Raider and Army Men series tanked (though thankfully they've managed to revive the Tomb Raider series by taking it away from Core), was because studios decide to just start churning out sequels.

That's not really the case with the Grand Theft Auto series, though. Three games (plus two expansion packs, I guess you'd call the "____ City Stories" games) in six years is not a bad rate to be clipping them out.

I dont think its really the law of diminishing returns (every successive input decreases the marginal returns) so much as a law of going to the well too many times means eventually you come back with no water. What goes wrong is that studios (or publishers, or investors) forget that besides having the name on th package, franchises need a constant infusion of creativity to stay fresh int he minds of gamers. As long as that is still happening (ie the customers are sold on the idea that each game is different enough to be a good value), then franshices will keep releasing to the same (or more) amounts of profit (there is no diminishing factor to it). Once that stops happening, and studios are just churning out another game witht he same franchise name on it, then they find taht teh well is dry and the returns take a sharp and precipitous drop.

Unless by "law of diminishing returns" joystickgenie was meanign that the variable inputs are constantly going up witht he new gen due to the higher cost to make games, and that in the next gen the marginal return on investment would go down, even assuming that the sales numbers do not go up to offset that (ie if the number of game sales increases less that hte profit per game decreases due to runaway dev costs, the marginal profit will go down per game compared to the previous ones)

Take Two was not wholly made by GTA. Yes, GTA was a HUGE boon for them but take two is a gigantic publishers, with a whole host of fantastic developers under their belt (No, I don't work under Take Two :P)

As for the stock, I can't help but wonder if the sudden rise is due to the fact that GTA will not be exclusive to the PS3. If that IS the case, then you can expect the stock to rise a lot as the development cycle progresses, and get a jump after Bully is released and people realise how well it is selling. Have no doubt, Bully will be a big big seller. Hell, I'm going to buy a copy just to spite JT.

Michael Pachter is a hack analyst (and that's saying something considering how uninformed most analysts are) who knows nothing about the industry he claims to be an expert in. His predictions have been repeatedly proven to be unfounded and inaccurate and he hates Take-Two. He is likely aiming to see it bought out and is saying what he is to encourage it. He really shouldn't be taken seriously.
 
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