PCPCGames Auction House #1
by Simon on Feb.16, 2011, under News
Welcome to the first edition of the pcpcgames auction house. This is where I will be talking about the gaming and technology industry’s financial news once a week.
I am sure a lot of you have already heard me on the podcast (2/12) talking about Activision Blizzard’s (ATVI) rumor of taking over Take-Two Interactive (TTWO) . Activision Blizzard announced the discontinue of Guitar Hero line
last week, and their stock immediate dropped from $11 to $10.4 with a lot of investors fleeing away. Without a clear franchise’s game coming out in 2011, they need a big positive impact for the shareholders. Activision Blizzard, the industry le ading game developer and publisher, currently has no debt and about 1.5 billion free cash to spent. Vivendi SA (VIV), current major stockholder of ATVI, sure will have some say in this, but after they finally sold off all their NBC Universe stocks this year for 5.8 billion; they should be okay for ATVI to do some business.
Key Stats:
Activision Blizzard
Enterprise Value: 11.48B (2/16/11)*
Total Cash (mrq): 2.85B
Total Debt (mrq): 0
Profit Margin (ttm): 7.98%
Take Two Interactive
Enterprise Value: 1.07B (2/16/11)*
Total Cash (mrq): 251.18M
Total Debt (mrq): 104.05M
Profit Margin (ttm): 3.68%
*by Yahoo! Financial
mrq – most recent quarter
ttm – trailing twelve months
I want to know what do you think about this? Do you think Activision buying Take Two Interactive will become a monopoly in the gaming industry? Or they already are a monopoly with Blizzard Entertainment? If you like the financial stats, stock market, business report as much as I do, I would love to talk to you. Please comment below!
February 16th, 2011 on 8:33 pm
I love the financial speak Simon! As a fellow CPA, I can appreciate someone who looks beyond the media headlines and gets into the numbers. ATVI acquiring Take Two would definitely give them a lot more weight to throw around up there. They even have similar development strategies (create or acquire a popular franchise and produce produce produce), so I don’t think that the consumer would even see a difference. I wouldn’t mind owning some Take Two stock when/if that acquisition ever happens I’ve never really dug into the balance sheet accounts of these gaming companies like you are proposing, but it does sound like a point of interest for future conversations. Well done sir.
February 17th, 2011 on 11:16 am
It’s going to be interesting to see what Strauss Zelnick, ceo of take two, do. He is a smart guy, harvard business and harvard law graduate. Right now take two stock is a16, I think 26 per share maybe the price activision has to pay, so that will drive up the price a bit.