It pays to be bad.
GTA4 has lived up to the hype. The title sold 6 million copies during its first week on the market, and it's still selling briskly. Through the end of May, Take-Two has shipped more than 11 million copies to retailers.
Take-Two is realistic. though. It knows that this past quarter was special. In raising its guidance for all of fiscal 2008 to a range of $1.65 to $1.85 a share in adjusted earnings on $1.4 billion to $1.5 billion in revenue, it isn't expecting a whole lot more than it generated during the quarter that ended in April.
However, who is EA kidding with that ridiculous $25.74-per-share offer? Even if it locks up the FTC's blessing, does it really think the hot developer with the best-selling video game of all time will go out for 14 to 16 times this year's earnings? Is it any wonder why EA has collected only 8% of the outstanding shares with that kind of lowball offer?
EA itself is trading at 31 times Wall Street's recently reduced profit target. THQ
I'm not suggesting that Take-Two can't be had. But it will need to be had at a fair price.
Take-Two isn't perfect. It's going to post a loss in its 2k sporting-games business, and the episodic installments to GTA4 that it will deliver exclusively to Microsoft
Here's hoping EA stops wasting everybody's time and either bows out of this laughable buyout or comes back with an offer that Take-Two can't afford to refuse. As things stand, Take-Two will be just fine as it shakes its head as the industry's bad boy.
Yes, it pays to be bad, but only when you're really good at it -- the way Take-Two is.