Take Two shareholders bailing out - EA Cometh?

[BengaBenga]

jalsonmi said:
Yes, I understand that's how stock prices go up and down, and what you say certainly makes sense for Take Two. Many people saw the EA bid as a reason to buy and the rejection a reason to sell. Those who held did in hopes of a second bid that would raise the stock higher. When it didn't come the market fell out from under Take Two. But considering EA is in the position, of course, of knowing whether they would make a higher bid, is it (and I'm sincerely asking--is it?) possible the decided to let the market correct after the high caused by their offer, and be the ones picking up the stock on the cheap from all these people desperate to sell? That they decided it was just easier and cheaper to become majority shareholders in Take Two this way and perform a hostile takeover?

A few other questions I pose to you (any of you who know the market better than I do):

1. Are there still people in Take Two that have enough stock in the company to hold onto majority shareholder status?

Probably not. Usually executives and senior management have a lot of shares in the company (from bonusses etc), but not anywhere close to a majority. Big investors like banks, pensionfunds and equity funds tend to have large shares in companies.

2. If EA is doing this, withholding a second offer in order to allow the market to correct itself and pick up the discarded stock on the cheap, is that insider trading?

EA can never get a majority in T2 by buying cheap shares. The volumes EA must buy to get ownership are such, that the market will react anyway. To get a majority, EA has to convince the large owners to sell and they can only do that with a very competitive offer. It would only be insider trading if individuals within EA are buying T2 for themselves with the knowledge of a higher offer somewhere in the future.

3. If the answer to 1 and 2 are both no, is there a chance EA could pull off something like this and takeover before the release of GTA4? Might GTA4 be enough of a stock boost to foil this hypothetical plan I've foisted on EA?

The value of GTA4 is already incorporated in T2´s shareprice. Once the game arrives it won´t cause a sudden boost in shareprice, because everyone knows the game is coming and there´s a certain revenue expecation. If the games sells above expectation the shares will rise a bit, if it sells below they will drop a bit, but nothing spectacular. For EA this wouldn´t matter anyway, because if they buy T2 this financial year they will also recieve the profits from GTA4.

4. Man, does EA suck, or what?

3 intelligent questions and now this?