Novice Investing - Another Take at Take Two

Date: Sunday 20th 2008f July 2008 12:44:36 PM

Another Take at Take Two - 08/21/2007

By: Hari Wibowo

Take Two Interactive Software Inc. (TTWO) has had a string of disappointing events. Two years ago, trouble brew when the gaming commission assign an 'R' rating for its franchise hit 'Grand Theft Auto. As a result, sales plummeted for this title. Take Two responded by buying the creator of game 'Civilization'. At the time, the company has $ 195 Million in positive net cash or $ 2.75 per share. Now, with its shares of net losses, Take Two now spots a positive net cash of $ 108.5 Million or $ 1.48 per share.

This past week, Take Two seems to see the light at the end of the tunnel. There are positive reviews regarding its newest game release 'BioShock'. The game is available in X-box 360 and is expected to sell between 1 to 1.5 million copies, for this holiday season 2007. Most publications have given BioShock almost a perfect ten score, which shows that the game may appeal to become a franchise as big as Grand Theft Auto. Only a few analysts believe so but with the delay of the latest Grand Theft Auto IV into early 2008 from previous schedule of October 2007. This clearly hurts Take Two's profitability this year. Therefore, despite having only two platforms for BioShock, Take Two needs to perform well with its BioShock sales to stem some losses. At this point, most analysts predict that BioShock will have a positive modest impact to Take Two's bottom line.

What is appealing to us as investors is that after rising to as high as $ 24.80, Take Two is recently traded down to $ 12.50 per share. While balance sheet has weakened compared to the previous two years (due to continuing losses), if we expect good performance of BioShock and the release of Grand Theft Auto IV next year, Take Two should be in the black for 2008.

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Disclaimer: The sole purpose of this article is educational. This article is merely the opinion of the writer and is not in any way a buy/sell recommendation regarding Take Two Interactive Software Inc. (TTWO) or any other securities.

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