More Take-TwoTake-Two stock plunged over 19% today.
It recovered slightly by the close, down "only" 13.74%, but in after hours trading it lost another 2.45%. It's now trading at $14.69, which is less than half what it was trading for in June--its all-time high--right before the "Hot Coffee" controversy erupted.
Erupted. That's a pun.
Take-Two has routinely seen dramatic declines in its stock (it lost 75% of its value in just a few months in 2001). Yesterday, though, their audit head resigned. Today, Banc of America downgraded their stock and had some relatively disturbing comments (thanks to Shane Courtrille, who passed along the link):
--the company is burning cash at an "alarming" rate
--they believe an SEC investigation (another one) could be forthcoming
--they believe that Take Two's legal counsel could be next to resign
--"our work on Take-Two leads us to believe that serious problems surround the company's governance"
That's a nasty bit of business. And it's particularly nasty for us, since Take-Two controls so many important gaming franchises. It's not that they can't make and sell games--they do extraordinarily well at that. It's their basic problem with corporate honesty that's killing them.