Take-Two
I've been getting quite a bit of e-mail about two Take-Two stories today: first, that a class action lawsuit has been filed against them, and two, that Elevation Partners is trying to buy them.Class action lawsuits are pretty common when a company suffers a rapid decline in its stock price. I don't think that, in itself, means much of anything. There are far better indicators that Take-Two is in serious trouble, and I've written about them.
Here's the other thing: I'm not sure Elevation Partners is really making a serious attempt to buy Take-Two. This kind of thing also happens all the time--companies float rumors about themselves, hoping they gain some traction, which might then attract the real interest of other companies. Here's the excerpt from the NY Post story
(http://www.next-gen.biz/index.php?option=com_content&task=view&id=2200&Itemid=2):
Bono's private-equity firm Elevation Partners is rumored to be eyeing a bid for troubled video-game company Take-Two Interactive — developer of the popular "Grand Theft Auto" series. A potential deal could be worth more than $1 billion, including debt.
If you want to float a rumor about someone interested in your company, Elevation Partners is the company to use. Very high-profile (Bono), plus they recently bought Pandemic and BioWare. It's the perfect trial balloon to float to see if anyone out there really is interested in the company.
And if they really are interested--well, good luck. I don't think anyone will ever know the true financial state of Take-Two until after they've bought the company and brought in a hundred auditors to untangle the books.
In house terms, it's a "fixer-upper."
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