Take-Two stock drops following EA pullout

by Alexander Sliwinski { Sep 15th 2008 at 12:00PM }

After EA announced that it had finally given up its bid for Take-Two Interactive yesterday, Reuters reports that Take-Two's stock has dropped nearly 30% in early trading this morning. EA's $25.74 hostile bid had been rejected numerous times by Take-Two's board and investors. The stock (as of this writing) is currently down over $5 to around $16.50 per share.

Take-Two chief Strauss Zelnick isn't sweating, apparently, as he maintains that the company has "strategic alternatives." Speculation has that slowing sales of GTA IV may have futzed with Take-Two's negotiating position with EA. Meanwhile, UBS analyst Ben Schachter believes Ubisoft could be waiting for its chance at nabbing the company.

Tags: ea, take-two, ubisoft

Reader Comments (Page 1 of 1)

gir @ Sep 15th 2008 12:04PM

Haha...take that!!

Waqman @ Sep 15th 2008 1:55PM

LMFAO.

KarlW @ Sep 16th 2008 1:45AM

Do you get the stock market at all? If EA says they're going to buy the company for X, the share price jumps to make the company worth X. If you buy it at lower, you're guaranteed to make money when the deal goes through. If you buy it for more, you're guaranteed to lose money (unless you're buying a massive amount because you're actually mounting your own hostile takeover).

Now, since the deal has fallen through, the share price can settle back to what it was. It may suffer a small dip because some investors from outside this area hoped to make a quick buck and now just want to sell. This is entirely expected and has happened after almost all failed takeovers in history, in any industry.

BigD145 @ Sep 15th 2008 12:09PM

See what you did, EA. You've cheapened another name. Does your taint know no end? At least EA is also getting hit considering they own some of that stock.

shrapnel09 @ Sep 15th 2008 12:12PM

i was going to put my daughter to college with my take 2 stock.... it was a nice dream while it lasted

Lone Starr @ Sep 15th 2008 12:17PM

Wow, how much do you own? You might want to diversify, lol.

YpoCaramel @ Sep 15th 2008 9:56PM

Personally I feel Take Two will produce more value in the long run without the takeover.

Nigelbrown @ Sep 15th 2008 12:22PM

Or you might want to buy now and hold on. The price will go back up.. just wait and see.

Vidikron (FU) @ Sep 15th 2008 12:23PM

Ouch... I bet quite a few people holding on the T2 stock hoping for a price jump if the buyout went through just got burned big time.

Gaucho @ Sep 15th 2008 12:31PM

See, That goes to show that pulling out is a bad idea.

quasebrasileiro @ Sep 15th 2008 1:12PM

That's what she said.

Gaucho @ Sep 15th 2008 1:18PM

OOOHH snap, crackle and pop. we just totally Pwnasuarus rexed that headline!

arrakisman @ Sep 15th 2008 12:43PM

I think all stocks are kinda droping ATM.

aristokrat @ Sep 15th 2008 12:51PM

Regardless of what you think of EA, if the stock price doesn't bounce back soon (or they don't get a higher bid), then Zelnick has failed the stockholders by not maximizing their gains. Were I a T2 stock holder, I'd be fairly unhappy right now as EA is the most money-flush of potential suitors, and who's to think that Ubisoft has cooled on T2 as well (they'll see the same things EA did if they attempt a merger, and they don't have nearly the incentive, like quashing all other sports game competitors). If anyone was going to overpay, it was going to be EA, so I think T2 just lost out big (from a financial prospective).

Antagonist @ Sep 15th 2008 12:59PM

http://riversmeeting.files.wordpress.com/2007/07/nelson-haha.gif

ivanotter @ Sep 15th 2008 1:14PM

Thank God!! A company spared from EA's marginalization and stupid DRM insanity.

Neil @ Sep 15th 2008 1:23PM

I bet all those idiot shareholders that listened to Zelnick are kicking themselves at the thought that they could have had $10 more than the stock is currently worth.

mirage @ Sep 15th 2008 1:34PM

I am no financial expert here, but could EA swoop in now and buy up the stock for this now bargain?

LaughingTarget @ Sep 15th 2008 2:12PM

This would give EA extra leverage. T2 has nothing on the horizon that could count as a share bolstering device. They are mostly a one property publisher (GTA). This isn't a stock that's going to miraculously rebound, this is likely its real value. Stock prices are usually valued between real values and the proposed buyout value and only increase to actual buyout price when the deal is finalized.

tifosiotaku @ Sep 15th 2008 1:43PM

As long as Take Two allies themselves with someone who won't screw with Midnight Club, it's all good.

ascagnel @ Sep 15th 2008 2:14PM

All stocks are tanking now. I'd find it hard to imagine a company that's so back-backloaded as a videogame developer (that is, they incur a substantial debt at first with the payoff later when the game releases) not having some ties in the financial markets to keep themselves flush with cash during the longer dev cycles. These agreements likely included Lehman Bros. and Merrill Lynch. These two banks failing will cause large problems for every publicly traded company.