In 2005 I bot share of Take-Two Interactive on the strength of their incredibly innovative video game franchises, GTA and some newer titles I knew they had coming out like Warriors and Bully. The developers at Rock Star over in Scotland were changing the industry in that they were making games that were great to play. They took video gaming to a new level in terms of gameplay. This is what Nintendo is doing today with its Wii and DS games. However no matter how good its developers were, its managment didnt fly straight. Clear proof was how they handled the "hot coffee" problem. Once I saw politicians, lobbyists and the media ganging up on video gaming with TTWO and its GTA as their whipping boy I knew that it was time to bail. I lost about 20% even though I still thought the firms developers were making smart games.
On Wall Street there is an old saying. "Dont fight the tape."And the tape has been going against TTWO for sometime. Now some big investors want to takeover the company and think they can turn it around even while its managers are under SEC investigation. At the end of the day they are buying some creative talents and tired franchises. What happens when those Rock Star developers split to start their own companies or work for companies not marred by taint and being restructured by Wall Street sharks? I would avoid this stock.
$21.26 (04/08/07)
