Lowered net incomes, lawsuits up the wazoo, an SEC investigation, cash flow problems, a devastating product recall, horrendous P.R., negative political attention, key resignations, and a stockholder named Jack. For a publicly traded company, such indicators usually mean that your share price is headed for a swirly.
The latest round of bad news for Take-Two began on January 27th, when an SEC filing revealed the resignation of board member Barbara Kaczynski. T2 (NASDQ: TTWO) stock hit an all-time low of $14.69 at that point, a far cry from its June, 2005 pre-Hot Coffee peak of $27.81.
Take-Two had losses of $29.1 million (about 41 cents a share), and revenues were only half of what they were during the GTA: San Andreas sales peak. Surprisingly, the decaf version of GTA: San Andreas, was listed alongside GTA: Liberty City Stories as T2's best selling products for the quarter. Other top-selling titles included Civ IV
and NBA 2K6
. Three Xbox360 launch titles (including NBA 2K6) were rushed through production to try to cash in on the holiday market, although a shortage of Xbox360's hampered software sales for T2 and everyone else in the business.
According to GameSpot, analysts went into ho-hum mode, most erring on the side of pessimism about the company's future performance. While revenues exceeded expectations, so did losses. Most analysts slashed their earnings-per-share estimates, and predicted that Take-Two had a rough year ahead.
Morgan Securities' Michael Pachter was skeptical about the company's efforts with regards to sports titles (especially Rockstar's upcoming title Table Tennis), and expects Bully to be "a mediocre title at best." He did note that, as a franchise. GTA was still going strong, accounting for 25% of revenues, and is "a key announcement away from providing a catalyst for rapid share appreciation." (CM: A possible GTA sequel? Read on...)
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