It's a real burden, being right so often. This is EXACTLY what I said would happen more than a month ago.

EvoAnubis

The end of my prior post should have said... where EA own a significant portion if the company even if they walk out of the buyout proceedings.

wild homes

@Diesel_Power: When did I EVER say that T2 was stupid for denying EA? What's more, the majority of posters screamed for T2 to deny EA's offer.

A Blind man could see that GTA IV's immense hype and media coverage would bring about huge sales and a rise in stock pricing.

I understand if you're a little late to the party and frustrated because T2 is out of EA's reach now, but don't accuse me of hopping on the bandwagon or being ignorant of how the US economy works.

Alexander-The-Great

I think the end result of it all will be thus:

Investors will see that even better than anticipated GTA sales AND a stock-inflating buyout offer (which combine to make a really favorable, and really teporary, stock situation that's unlikely to be repeated any time soon, if ever) only push the T2 stock just slightly higher than EA's offer, and will then accept the deal.

wild homes

Ugh. The amateur lawyering on Kotaku usually gets me steamed since I am one, but the amateur business analysis on here is a 1,000 times worse.

@badasscat: Thank you for the dose of reality. This is 100% spot on. The price was long ago taken into account.

Do you really think the biggest video game company on the planet was trying to purchase another company for hundreds of millions of dollars just to get some GTA money? There is more to this purchase than GTA, and more importantly, the reason these self-interested board members did not want to sell is so they could line their own pockets with lucrative buy outs from EA and waiting until they could change their contracts for more money.

The reason why EA's offer is lower than this is the poison pill Take Two adopted, which devalues the company. The actual reason why the share price is up is because of the takeover offer. Take Two's management have consistently shown terrible business skills and management decisions, and the shareholders should be praying for EA to take over.

Catalyst

And everyone should realise that EA will catpitalise on this situation. Let's assume GTA4 outsells predictions-- at this point, sound investors will sell, because as other posters have pointed out, 99% of the time Take-Two is a really bad investment. They remain a pretty poorly managed business on the verge of bankruptcy. And if I was an investor in this company and saw a situation now with a stock temporarily inflated by GTA4 sales (which are not a maintainable level of success for T2 as a business) and a takeover bid that EA could pull out of (thereby pretty much wrecking the stock price) I'd sell before this thing peaks and pocket some change.

The moral of the story is that EA is going to be able to buy a lot of T2 stock, because a lot of people will look to capitalise on this situation and sell. We could see another EA-Ubi situation, where EA own a considerable portion of the company.

wild homes

Take Two's stock is only temporarily trading higher because of fever pitch now that GTA IV is about to be released. Lets take a look at this again in about 3 weeks and see what the deal is.

nintend0nick

And FYI: The offer was extended to May 16 - so those willing to ride this out, at least wait until that date nears if you want to get top dollar.

nonpareil

@ocalot: That's some of the most peculiar logic I've ever heard. And by peculiar I mean 'comically unsound and ridiculous'. EA should back out of this process because Take-Two have good IPs, and are therefore 'too good for EA?' I might be wrong, but I thought EA wanted to buy them because they were valuable and had quality IPs.

@cybereality: This deal isn't about Take-Two NEEDING EA, it's about Take-Two being a lucrative opportunity for EA.

wild homes

Drakron makes a good point - but we may yet see a jump as the GTAIV numbers absolutely asplode over the first week.

nonpareil

Flip your shares. Raging 'Bull' of TT will not bear it's horns any higher for awhile.

Fyren

Err ... you people understand that the stock price is that high BECAUSE of EA bid?

EA price-per-share offer was not that higher that trading floor price-per-share, that caused Take-Two to immediate rise to the offer price and continue to raise to stay slightly above the EA offer.

The moment EA removes the offer the price goes down, I am not going to offer tips but this is a good time to sell, I doubt Take-Two stock will get this high any time soon.

Drakron

The thing with Take 2 is that it's stock is only worth anything when a GTA game ships. The rest of the time they teeter on the edge of destruction, law suits, and bankruptcy. GTA as a franchise and Rockstar as the devs is invaluable, but without them, Take 2 has proven itself completely inept.

wheezo

Good. I hope the stock goes even higher. Record sales tomorrow should help out that cause.

turbofreak

@Striderhayasa - Phillyyakk on PSN and Live.: - "EA tried to buyout TT before the launch so they could reap the rewards of GTAIV. That's the story."

That pretty much sums it up. I thought the same thing.

dead_red_eyes

Oh yeah, I'm a very happy Take 2 investor right now too :)

Snuffbox

Of course EA is gonna play this down that is not even a question. They will fight to get what they want even if it's to devalue take two and then revalue it under the EA name.

JorgieX

Take-Two doesn't even need EA, they are doing fine solo.

cybereality

This was as predictable as Sunset. It is why 2K would not sell out, and why investors like me where more than happy to tell EA to "Fuck off".

Acute Gamer

@Diesel_Power: huh? are you serious? you have to be kidding right? GTAIV was going to break sales records. EVERYONE knew that. Common sense then dictates that Take Two's stock price would go up as a result. Dude, that's the way it works. Look at Nintendo. Because of Wii and DS Nintendo's stock skyrocketed making them THE company to watch in gaming.

EA tried to buyout TT before the launch so they could reap the rewards of GTAIV. That's the story. anyone that didn't think GTAIV was going to sell like beer at the super bowl, was just being delusional.

Striderhayasa - Phillyyakk on PSN and Live.

@Caduceus: agreed, I don't think Take-Two is against the takeover per se, just that they wanted to wait until GTA 4 was out, and EA didn't. both positions make sense of course, it just strikes me that EA knew that the value would go higher after the release.

valarmorghulis

@Zaxxon Q Blaque:

Ironically, that's exactly what I said when I read the article title.

Ignatius

@duckmouth:

Yup. If EA hadn't bid, the price wouldn't be where it is today.

OGHowie

I'm honestly not sure how I feel about EA buying Take 2. If we look at the film and television industries, there are just a few major players who own roughly 85% of the little guys.

With that, we get some great, good, and horrible movies and TV shows. Sometimes smaller studios maintain their independence, sometimes they don't.

I think in order for the gaming industry to mature, something similar has to happen. Look at how fast EA came to the defense of Mass Effect when the Fox lies were being told. I'd imagine that EA would do something similar when GTA comes under fire if they were owned by EA.

but then look at the sports division. 2K Sports consistently puts out better sports games than EA, and I am not so sure that 2K Sports would still exist if EA bought them.

So it's a lot to think about, and more to look at that some people's blind hate of EA.

TheAngryHeretic

GTA's sales are already figured into the stock price.

There may be a slight uptick from casual investors who otherwise don't know anything about Take 2 and are just reading the papers now, but the big institutional investors bought in long ago. The stock market is always based on future earnings, it's always priced at least six months (and really usually years) ahead.

The only way the stock moves *significantly* higher than where it is now is if sales of GTAIV actually come in above the 9 million first-month sales that analysts are already expecting. That may happen, but it'd be a stretch to really bet on it. If sales figures do come out and show 11-12 million in sales in that first month, then you might see a little mini-run up that sticks.

But really, I wouldn't count on the stock going much above where it is now until we hear the first set of sales numbers, and even then only if they're higher than have already been predicted.

badasscat

Looks like EA may be in a bit of trouble when it tries to acquire Take-Two based on the current terms. Personally I think EA should leave Take-Two alone since Take-Two currently has some great ips that when used to their full potential could allow Take-Two to become one of the leaders in the industry. Take-Two has some great people working for them and I would hate to see any of them lose their jobs because of a buyout. So EA take the hint and leave Take-Two alone, their to good for you.

ocalot

Hardly surprising. I think EA was hoping to get in before the rush. Take-Two holding out for the probable good moolah coming from the release.

Caduceus

@Alexander-The-Great:

Give me a break! You didn't see it and not a lot of other people did either.

Article after article about how stupid Take two's decision was to turn down EA's offer, and a lot of posters agreed.

Diesel_Power

Of course, not only does Take-Two have a major game release, but all the news of the Buyout offer probably raised some interest in the stock.

Phishedone

It's going to go even higher, but not by much. I think sales of this game are going to outpace the estimates of analysts. The videogame market is notoriously hard to predict. Expected earnings are incorporated into the stock price but if the sales surpass expectations (which I expect they will), the stock price will continue to rise.

If Take 2 continues to restructure effectively, these gains may be sustained. Since Zellnick has taken over, T2 has improved by leaps and bounds.

Snuffbox

Well, it comforts me that my predictions are true...

Despite the fact how obvious my predictions may have been...

I guess all those early sellers of T2 stocks are kicking themselves in the balls for bailing out early.

Gummyworm

The fact that EA are bidding for them has also contributed to this rise, right?

duckmouth

@Alexander-The-Great: Nope. That's why the hostile takeover didn't work. EA tried to get 'em for a song.

Hubert Humphrey Methadone

Not surprising. When the first weeks' sales figures are released, I'll bet that stock just continues to climb.

Hubert Humphrey Methadone

Seriously, did anyone NOT see this coming?

Alexander-The-Great

HA! ^_^

Zaxxon Q Blaque

Screw EA

Abdar

Take-two is a different company run by different management now than it was after the release of GTA:SA. You can't expect the price of Take-two to tank under management who has gotten its act together and is about to have a truckload of money to develop and promote the high quality upcoming slate of games (not to mention add ons and sequels to GTA 4)

rockinthestocks

@PearceShea: Maybe I'm not reading your comment clearly, and if I'm not, I apologise, but I think we're in agreement that most of the current stock price is based on EA's interest and not on GTA 4.

wild homes

@dead_red_eyes: Except that to EA, the income from GTA IV (of which they would only see a portion, anyway) is singificantly diminished by the cost of buying T2. The point isn't getting GTAIV income its getting GTAV-XXXX and aquiring the biggest competitor to one of your cash cows (Madden).

PearceShea

Also it's worth noting that while the share price it's trading at today (and for the next month or so) may be higher, the daily volume is nowhere near the amount of equity in the company EA was looking to get. Today's volume is a bit more than twice the average volume at 4 million shares traded out of 76.8 million outstanding.

frieze

@Diesel_Power: It's still stupid. Most of the articles point out that it was possible that the release of GTAIV could drive the share prices above the offer price, but they all pointed out that that would be a very brief situation.

PearceShea

@wild homes: I defer to people who are paid to know this for a living, but as memory serves me, no video game (including any GTA) has boosted share prices for as much as it did for as long as it did the EA offer boosted T2's stock.

PearceShea

@Alexander-The-Great: Everyone saw that coming. It's why EA wanted to buy Take Two when it did so they wouldn't have to wait for the 3-4 months that it will take for T2's stock to drop down the offer level or the 6-8 months for it to drop further, or GIVEN HOW T2's STOCK HAS PERFORMED SINCE IT WAS FIRST OFFERED (I used to own some and they were historically losses), wait the 9-12 months it will take for T2's stock to drop back to being below 20 a share.

Look at the math. EA's offer inflated the value of the T2's stock by something like 30% while the release of GTA has only added somthing like 10%.

That is, the price is what it is because everyone thought they would make a profit if they bought T2 stocks before it accepted EA's offer, thus driving up the price big time before GTA IV came out.

If EA never made the offer it stands to reason that Take Two's stock would at this moment, be around the low 20s -at the very best.

And it's also important to note that most video game companies lack the staff to turn a profit between most games - meaning that T2's shares will drop to about where they were.

PearceShea

Yea, I figured this was going to be the result. Yet, I'm not going to boast about being right because even a moron could've seen this coming.

Or a child, for that matter.

Jest

The current value of the stock as of about thirty minutes ago was $26.35 per share, down about $.45 per share from the high earlier today. So, all told the hype around GTA4 has contributed a bit more than a quarter per share to Take-Two's value. Hats off to you geniuses who saw this coming. Remember me when you count your millions.

To put this into perspective, before EA made the offer Take-Two stock was trading at somewhere between $14-$15 per share. Now, is Take-Two wise for not accepting the deal? I don't know, but quite a bit of their value is based on the idea this deal happens.

wild homes

The share price will collapse after the EA offer is withdrawn ... or at the next quarterly meeting. As I keep saying, stocks are forward looking. This price is based on the coming earnings of GTA ... once the earnings are actually announced or in process, it'll fall -- because, what's next?

jayntampa

@Catalyst: So EA offers to buy TT and their stock goes up because of the offer...GTAIV has expected sales of 9million units (over some ridiculously short period) to break records and this has no effect what-so-ever on TT's stock price (however temporary the increase may be) and the justification of turning down the original offer?

I was of the impression that if TT sold the company to EA before GTAIV dropped they would have to be total fools. Of course this has a lot more to do than just GTA but one would have to be a total idiot to think EA or any other game company on earth would scoff at the chance to own that IP right about now. So...yeah...of course, this is more than just GTAIV but does this not allow TT to look at EA and say "we told you your bid ain't high enough son, give us more monies or step off"

Oh...and I would assume that the profits of GTAIV would be all gravy at this point as well? I'm asking...

Striderhayasa - Phillyyakk on PSN and Live.

It was at EA's offer last week, no shock TT's price has continue to rise with the press of THE AAA title of 2008.

EA is looking more foolish to this by the moment

huginn

@Alexander-The-Great: I don't know if I agree that T2 has suddenly been put out of EA's reach. Imagine if EA went public the morning of GTA's launch and said the buyout offer has been rescinded. Great GTA sales aside, the stock price would TUMBLE, because Take-Two stock value at this moment is based much more on the buyout than on GTA sales.

if I were EA, I'd be tired of his game already. I'd publicly announce that I'm withdrawing the buyout offer, and then use holding companies to buy huge blocks of T2 stock as it tumbles below $26 per share, and then consolidate those blocks into a minority ownership stake and give the remaining shareholders little choice but to agree to a new, less favorable deal.

wild homes

@rockinthestocks:

Let's point out that while yes, ZelnickMedia have only run the thing for about a year, that year was a loss too. It's not like Strauss Zelnick has a habit of making a lot of money off of distressed companies and then not turning those companies around (Lillian Vernon is the most recent flop of Zelnick's that comes to mind - and it's not like Blockbuster is doing all that awesome either)

PearceShea

Adam Rock

@wild homes: Your wrong, EA won't be able to capitalize on people selling at a higher stock price without raising its offer.

EA tried to take advantage of Take Two which was in a slump earlier this year because GTA4 was delayed to buy them out cheaper than they could. If GTA4 was released last fall then none of this probably would have happened.

A few weeks ago Take Two Management has said it has talked with other companies who were interested. So I don't know where there is this idea that Take Two HAS to sell out to EA and that EA is the only company that would be interested in buying Take Two.

NullsRevenge

[biz.yahoo.com]

The game's high quality also indicate that Take-Two and the Rockstar studio that made the game are also well-run operations, with the potential to crank out more hits, said Mike Hickey, an analyst with Janco Partners.

"EA should just pay up and just get this deal done and quit being so cheap about it. You've made a $2 billion bid ... and you're worried about three or four dollars per share," Hickey said.

rockinthestocks

Oh Take Two please hold on! be that underdog story!

Jackel2072

@NullsRevenge: And please, take a look at Take-Two's stock history over the last two years. It's been as low as NINE and no higher than TWENTY-TWO or TWENTY-THREE. So, how exactly were EA taking advantage of a 'slump'? This crap stock has been slumping for YEARS.

wild homes

@NullsRevenge: I think you might have misunderstood me. Think about this from an investor's point of view. Smart investors are in it for the long haul, and as recent history shows us, Take-Two ain't a good long-haul kind of purchase (looming bankruptcy, losses, management turnover, etc.) so it follows that the people involved in this are looking at the short-term-- a situation based around a recent surge in the stock price, based on expected GTA earnings and the EA offer. What these people want to do is sell before the stock returns to its natural level. So, this is going to put a lot of stock on the open market, which will drop to below $26 per share after the GTA bubble bursts. EA doesn't even have to approach the board, yet. They can buy a voting block for less than $26 per share, and get the company without having to raise the price.

wild homes

@NullsRevenge: They've been claiming that they have talked to other companies for a while now but no "white knight" has yet to appear.

PearceShea

EA was dumb to think they'd sell out before their cash cow was born.

justhesh

@Striderhayasa - Phillyyakk on PSN and Live.: Well, no, it really doesn't give them the chance to say that, because EA will come back and say, rightfully, that the entire reason the stock is that high is because of EA's offer.

Check out a three month chart of the stock. Aside from EA's offer, the stock has done nothing. This is just a blip and I would argue is one that cannot be explained by the release of GTA IV, given that everyone knew months ago that it would be a huge seller. The EA offer probably correlates to 90-95% of the stock price rise.

[finance.yahoo.com]

Catalyst

@wild homes:
Look at TTWO last 5 years and you will see the 'slump' as you call it is half of 2006 and half of 2007 punctuated by returns to over $20 a share.

TTWO has one of the strongest portfolios of game companies and games you can have.

The new management has done a great job of turning the company around and was just to wait to see the results of gta 4.

The main dip was around the hot coffee and accounting scandals that drove the stock price well below the value of the franchises it holds.

At $9 a share the company values was 684 million. The GTA franchise is worth at least half of that. Add in little franchises like bioshock and civilization and you can see the company is worth more than that.

I thought that Sony or MS would have bought them at that price for GTA 4 alone.

TTWO is worth a sold $20~ a share and is going to be a profitable copmany that will be a thorn in EA's side for years to come. Take Two is growing up.

I think that Niko is going to knee cap Madden.

Techguy1138

hey EA, GTFO.

joelface

@Techguy1138: That's a pretty well-reasoned argument, but it doesn't contradict my point. I've seen the five year numbers, and I didn't call TTWO's performance a slump, I was responding to someone else's choice of words-- in fact, I said it wasn't a slump, but a consistent performance (being that the stock has historically rarely traded for extended periods of time at or above the price of EA's offer).

Responding to your own words, I too feel TTWO is worth $20 per share; however, that's below the $26 that EA is offering. And I agree that TTWO has a great roster of titles-- that's why EA made the deal, after all.

TTWO might again be worth more than $26 per share someday, but it's not right now. It's probably overvalued by a third on the basis of the deal. And that's ok, it's how the market works. But for people to really think the stock wouldn't be at $20 without the deal is nuts.

It's like if you had five dollars and I said, hey you only have five dollars, and you said no I don't, I've got more than ten dollars. And them asked me for ten dollars and when I gave it to you, you screamed in my face HEY LOOK I TOLD YOU I HAD MORE THAN TEN DOLLARS XD!!1!

wild homes

It doesnt matter EA is doing a hostile takeover because take two believes that GTAIV is being undervalued by analysts. Plus the take over by EA is good for Take Two as a company.

sam1r

@wild homes: If you look back at what has happened to Take Two over the past few years you can see they got caught over the Accounting Stock Options scandal that caught many companies, the previous management wasn't that great. There also hasn't been a major GTA release in the past few years.

The market and economy in general have not been doing that great which you have ignored that in all your posts.

Take Two is worth the stock price trading today which at the market opening on 4/29 is $26.47. You may only think it is worth $20 but the market does not agree with you. If EA wants to buy up the stock that is selling now they will have to pay a price that is higher than their offer.

I think other companies involved probably have agreed to wait until after GTA was released before talking with management. Something that was asked of EA too but they decided to try a hostile takeover.

NullsRevenge

@wild homes:
I admit that I did sell some of my ttwo stock but I held on to around half of it.

There was,and still maybe, some short term gain to make on the EA offer. I really think that even without the ea offer that ttwo would be worth over 20.

I still think that ttwo will be a good long term position, and I've got my money where my mouth is. TTWO cyclical nature has made me a nice chunk of change but I think the price will be in less flux for now on.

Right now is usually the beginning of the gaming and toy slump in stock prices. Hasbro,ATVI,and TTWO are all up. I have long positions in all of them but I'll need to figure out how to better predict.

It helps to own stock in companies who 's products don't suck.

Techguy1138