Earnings juiced by GTA IV, Take-Two flirts with suitors
Take-Two Interactive Software, publisher of the blockbuster Grand Theft Auto IV game, is in "formal discussions" with potential suitors, Chairman Strauss Zelnick said today during the New York company's quarterly earnings call with analysts.
He didn't name names, saying Take-Two was not required to disclose the identities of its suitors with the Securities and Exchange Commission until the "discussions" turned into "negotiations." Silicon Valley corporate attorney Scott Dettmer gave a translation:
Discussions = "The first few dates, and talking vaguely about whether you like children or not."
Negotiations = "Talking about how many kids and how soon."
The way Zelnick sees it, his prospects improved significantly when Grand Theft Auto IV, which hit stores April 29, generated $500 million in sales during its first week. Those sales turbo-charged its second-quarter financial results -- revenue more than doubled to $540 million, from $205 million a year earlier, even though GTA IV had been out for only two days in the quarter ended April 30. Take-Two swung to a profit of $98 million, or $1.29 a share, from a year-earlier loss of $51 million, or 71 cents a share.
Investors were marginally impressed, nudging the company's shares, which had gained 34 cents to $27.65 in regular trading, up 7 cents to $27.72 after hours.
Still, Wall Street is betting that a merger will occur and that EA will cough up a bigger engagement ring. EA's current offer stands at $25.74 a share.
-- Alex Pham
Image of Grand Theft Auto IV courtesy of Take-Two's Rockstar Games.