Monday, April 13, 2009

Take Two Subject of Takeover Speculation (Again)

. Monday, April 13, 2009

By stockOzone team

Shares of Take Two Interactive (NASDAQ: TTWO) surged over 11% on Monday on renewed speculation that video game publisher is a takeover target.

In the options market too, heavy call buying activity was witnessed, indicating that traders are once again betting upon a potential acquisition of the company.Trading of bullish options rose to 10,185, or 14 times the four-week average, with calls exceeding puts by a 12- to-1 margin.

Based in New York City, New York, the company has developed and published many notable games, including the hugely popular Grand Theft Auto series.

Last year, Electronic Arts (NASDAQ: ERTS) proposed an acquisition of Take-Two Interactive for about $2 billion. The offer was rebuffed by Take-Two.

Though video game industry has remained resilient amid economic downturn, Take Two's financial performance has been far from satisfactory.

Early in March,Take Two reported a first quarter net loss of $50.4m or 66 cents a share on revenue of $256.8 million. That compares to a loss of $38m or 52cents a share on revenue of $240.4m for the same quarter last year. For the current quarter, Take Two expects to report losses in the range of 10 to 20 cents a share and revenue in the range of $200 million to $220 million.

Shares of Take Two Interactive jumped $1.05 or 12.50% to $9.45 in regular trade on Monday.Shares of the company have lost over 65% in value in past 52 weeks.

Disclosure: Author does not own any of the stocks discussed here.

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