Bad Day, Worse for Take-Two (TTWO)

Everything is in the red today, and after Electronic Arts walked away from their $25 per share bid to buy Take-Two Interactive (NASDAQ:TTWO) yesterday, TTWO shares are back down to the $16 level.  Let's not forget these are the guys that are behind GTA and BioShock.

Electronic Arts (ERTS) on Sunday announced that it has terminated talks to acquired Take-Two Interactive (TTWO) and decided not to make a proposal for an acquisition.

In a statement, EA CEO John Riccitiello also said the company is “tracking toward a record breaking year.”

Take-Two had rejected EA’s last bid of $25.74 a share as inadequate, but announcement in August of a confidentiality pact between the two companies had raised hopes on the Street that the two video game companies might eventually reach a deal.

Fellow Masters, TTWO shares are right back to where they were before the whole EA bid. For those loyal readers, you may remember how we told Master Pick subscribers to buy TTWO back in November, then cashed out after shares jumped on the EA bid back in Feburary. 

So can you buy again?

Not until the dust has settled, and on a day like this, no way.  Everything is going lower.  However the Masters believe there is still value in TTWO shares, and JANCO agrees with that.

JANCO upgraded Take-Two Interactive Software Inc. (TTWO) from Accumulate to Buy, following today's sell-off after EA terminated talks to acquire the company.

The firm said, "We believe the Company's financial prospects will benefit from a portfolio of exceedingly strong IP, arguably the best development teams in the world, a resilient new management team, and a strong video game market. We recommend investors opportunistically acquire the Company's shares today, which will likely suffer near term from Electronic Art's decision not to acquire them and the tangential impacts of plunging global markets."

JANCO set a price target on Take-Two of $35 per share (20x EPS estimates), which is a more than 100% premium to today's $16.45 price.

The Masters want to buy Take-Two for BioShock 2 (2009 fiscal year) and the Grand Theft Auto franchise (who knows), but with new titles for those games so far away, you can't buy shares on today's big drop.

Hang in there, like Niko, a time for revenge will come to those who are patient, timing is everything.

SOURCE: http://blogs.barrons.com/techtraderdaily/2008/09/15/take-two-shares-plunge-as-ea-drops-bid/