Due to a disagreement over PRICE, Electronic Arts (ERTS) announced yesterday that they are formally halting TAKEOVER negotiations with Take Two Interactive (TTWO). As a result of the news, shares of Take Two fell back to their pre-EA bid levels of about $17.00/share as investors reacted negatively to EA's bid of $25.74/share being taken off the table (think 'PRICE FLOOR').http://www.bloomberg.com/apps/news?pid=20601213&sid=aprL_MNHg9ns&refer=home
Anecdotally reacting + per previous blogs posted on this subject (FYI, you can refer to them by clicking on 'Take Two Interactive' in the Archive Keyword Reference section on the right), while Take Two's volatile price action can OFTEN test one's resolve, I am still a firm believer in TTWO's fundamental growth story..whether the company remains independent or not. While my investing thesis related to the company being acquired may take a while longer to be realized, I am still quite confident that Take Two will eventually receive another TAKEOVER bid for its proprietary content in the rapidly growing and consolidating video game industry.
BOTTOM LINE - I view the ERTS related sell-off as an OPPORTUNITY similar in SCOPE to the one that was presented to investors of Take Two around this time just LAST YEAR (the company's shares OVERreacted to GTA 4's delay last July and declined violently in a 3 week stretch from $20.05 a share on 7/27/07 to $12.25 a share on 8/17/07...a 40% drop in 3 weeks!). I plan to add to my small-ish position once the stock and broader market shows signs of stabilizing (in VOLATILE times like these PATIENCE is most certainly an investing virtue).
Data Courtesy: Bloomberg
Full Disclosure: I own shares of TTWO.
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