Opinion on  TakeTwo Interactive Software Inc (TTWO)     Sector: Technology  >  Industry: Software & Programming
Take-Two: The Saga Continues

The news out of Take-Two (ttwo) this morning, that an investor group wants to put in its own slate of directors, is interesting if for nothing else because of who is NOT in the slate: Carl Icahn. Let's not forget the stock rose late last year, in large part, to the disclosure of Icahn's role as a significant investor. But as the New York Post reported, "Mr. Activist" has been selling his stake. Why would Icahn sell something that he thinks has value? Maybe his research suggests this is one company that all of the activism in the world can't truly help. Also missing from the slate: Value investor Larry Robbins of Glenview Capital, who sold part of his large stake last year. Meanwhile, the news out of the company last week about financials only got worse than expected, not better. The beat goes on.

If you've read the various posts below, you can see that the wording of Take-Two's (ttwo) convoluted disclosure, in its 10-K, could be construed as suggesting the formal SEC probe followed a request by Take-Two itself. That's not the case.

In response to my questions, General Counsel Seth Kruass, via an email response through a spokesman, said that Take-Two "was informed on March 15 of the existence of the formal order that the SEC staff obtained in connection with the options probe. We quickly requested a copy of the order, which the company received on March 30. We reviewed and promptly disclosed the order."

He adds:

"The company does not believe the fact that the staff obtained a formal order reflects any material change in the SEC investigation as it relates to the company. However, the company's new senior management is committed to transparency and first in class corporate governance...

"The fact that the staff obtained a formal order of investigation does not, in any way, signal that either the company has decided to stop cooperating fully with the SEC or that the SEC has broadened its investigation against the company. To the best of our knowledge, this investigation remains focused on the company's historical stock options granting process and the roles of certain individuals in that process. The company is not surprised the staff obtained a formal order since it is a procedural mechanism that allows the staff to, among other things, attempt to compel testimony (or force individuals to assert their 5th Amendment rights) and subpoena documents from any individuals no longer with the company who, unlike the company, might be unwilling to voluntarily produce them. The company has informed the staff that we will continue to produce any desired documents voluntarily, and will continue to fully cooperate with its investigation.

"We fully expect to continue to work with the staff, as well as the other governmental agencies, towards a resolution of this matter on behalf of the company. However, as demonstrated by the criminal conviction and SEC actioin against our former CEO, Ryan Brant, there remains the possiblity that other individuals formerly associated with this compahy will have their conduct reviewed and will be held accountable, as appropriate, by the governmental authorities reviewing the relevant facts."