Take-Two Stock Plummets As EA Walks

Shares of Take-Two tumbled this morning as the market opened to news that Electronic Arts had decided not to pursue its acquisition of the company. EA offered to buy Take-Two for $2 billion, or $25.74 a share, in February 2008. Throughout the months that followed, on strong sales of Grand Theft Auto IV and alongside a management turnaround well in progress, the publisher's shares stayed level in the $24-$26 range, at times approaching the area of $27 -- but as of press time today, the per-share value of Take-Two is currently at $17, a low it hasn't seen since before EA's initial offer. It's a loss of over $4.50 per share in today's trading for Take-Two, who had maintained its solid share value in the summer had more to do with the release of GTA IV, the resolution of all its outstanding debt, and investor confidence in its future outlook -- and less to do with EA's bid. Analysts had maintained, however, that the majority of Take-Two stockholders were arbitrageurs eager to see the company reach an agreement with EA. The return of the publisher's per-share value to one approximate to what it was prior to EA's interest seems to bear out this viewpoint. EA's shares were also down by about one percent to $44.08 per share. The market in general opened to anxiety today as investors speculated on the bankruptcy of Lehman Bros. and the acquisition of Merrill Lynch by Bank of America.