A Chance For Electronic Arts (ERTS) To Walk On Take-Two (TTWO)

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By Douglas A. McIntyre Published
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It is about the time that Electronic Arts (ERTS) is expected to extend its hostile bid of Take-Two Interactive (TTWO). Take-Two has argued that it is worth much more than the EA offer. Two things would say that the argument is not true.

First, although the new Take-Two "Grand Theft Auto IV" video game launch was extraordinarily successful, it failed to move the company’s stock up. Second, no company other than EA has offered a dime for the company. That may be because Take-Two’s recent earnings have been lackluster. It also may arise from the fact that very few companies can get the kind of economies of scale that EA can get from buying another video game company.

All of this should convince the EA management that its best bet is to do what Microsoft (MSFT) did with Yahoo! (YHOO). Redmond simply walked away and watched the stock of its target fall.  Then, lawyers and raiders crawled all over the company.

Take-Two trades at $27 now, very near its 52-week high. If EA does not extend the date for its offer, it may even get Take-Two for less than that.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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