Take-Two Drives, Visa Thrives, Meritage Dives

It's time to tap into your inner carjacker.

Take-Two Interactive (Nasdaq: TTWO  ) hits retailers this morning with Grand Theft Auto IV, the latest installment in its violent yet insanely popular video game series.

This is the kind of news that would only excite the audience of young males who live and die by release dates. But the stakes on this morning's debut are high, after Take-Two rebuffed a $2 billion unsolicited buyout offer from Electronic Arts (Nasdaq: ERTS  ) . The rejection was based, in part, on Take-Two's desire to see the hit title hit stores.

Take-Two's reluctance to accept EA's premium bid got a boost when the company lapped Wall Street expectations and raised its guidance last month. Now it needs the game to hit it big, to convince shareholders that cashing out to the leading video game software company would be a premature exit strategy.

GTA IV should be huge for Take-Two. Fans have had to wait years between releases in the past, but Take-Two already has plans for episodic installments. Since the new chapters will be delivered online -- and stored on console hard drives -- Take-Two stands to hit pay dirt by selling high-margin titles that require no packaging, distribution, or inventory overhead costs

Take-Two is fighting for its independence, but it's also battling for the right to command a higher buyout bid from EA or any other potential buyer. Between healthy retailer preorders and favorable buzz among diehard reviewers who have taken an advance ride around GTA's violent streets, things are looking up for Take-Two.

News to go
We're choosing plastic over paper, at least when it comes to payment options. Visa (NYSE: V  ) posted a 19% surge in payment volume in its first quarter as a public company. Visa also earned $0.39 a share, or $0.52 a share on an adjusted basis. However, the stock dipped in after-hours trading, after the company warned that top- and bottom-line growth rates would slow for the balance of the year. I guess that's a new definition for the industry term "chargeback."

Merck (NYSE: MRK  ) got a Dear John letter from the FDA, tripping up its plans for a new cholesterol-battling drug. The Not Approval action letter applies to a Merck drug showing potential as a treatment of primary hypercholesterolemia or mixed dyslipidemia. Those are fancy words related to countering high cholesterol, but you can consider them ammo for your next Scrabble tournament.

Are billion-dollar writedowns becoming our hottest new export? Berlin's Deutsche Bank (NYSE: DB  ) is posting its first quarterly loss in five years this morning, dragged down by a whopping $4.2 billion in asset-writedown charges. Better brush up on learning how to say "I'm sorry" in German.

Meritage Homes (NYSE: MTH  ) became the latest homebuilder to post a wider-than-expected loss. Orders fell by 34%, but what else is new? We all know that there's a glut of available homes on the market. Stingy lenders are only compounding the slowdown. The company may as well rename itself Age Homes, because there isn't a whole lot of Merit in this sector until the supply demand dynamics reverse.

R-E-T-R-E-A-T may be a challenge to spoon out in one of Campbell's signature alphabet soups, but Campbell Soup (NYSE: CPB  ) is pulling back in certain markets. The food giant announced several initiatives last night, including closing an Ontario plant and bowing out of its snack-food business in Australia. Campbell anticipates $230 million in pre-tax charges and implementation costs to complete the repositioning. If it helps ease the sting, here are my suggestions for a few new themed soup flavors:

  • Cream of Desperation
  • Thunder Down Under Broth
  • Canadian Closure Consomme
  • Chicken Little Noodle

Have a great day out there.


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