Revisiting the attempted buyout of Take Two by EA - RaychelSnr's Blog

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RaychelSnr's Blog

Revisiting the attempted buyout of Take Two by EA Stuck

Posted on July 27, 2009 at 02:34 PM.

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Over the last year, I have joined in with many Americans in getting a crash course in an education on how the stock market works as well as how our economy fundamentally works. This morning, I decided to take a look at the failed EA buyout attempt of Take Two from last year and it's resonating effects on both companies stocks and overall business.

Here are links to both EA's chart and Take Two's chart from the last two years: EA & Take Two.

Looking at both charts I think a few things are apparent:

1)Take Two stockholders are probably not too happy that they declined EA's $26 a share offer, as the price is now down around $8 a share. After the buyout news hit, Take Two's stock shot straight up and then subsequently, when the offer was withdrawn, the stock plummeted.

2)While Take Two stockholders might be singing the blues, EA's stockholders are probably feeling a bit of relief that they didn't buy Take Two for the price listed just before the craziness began on Wall Street last fall. Not only was the price they were offering way too high in retrospect, but EA would be dealing with a much tighter pocketbook right now thanks to the deal.

3)Sports gamers got the good end of the deal out of this, as we got to keep the 2K brand of games around, and EA is much better off financially than they would have been with video game sales now down over 29% year over year.

Disclosure: I do not hold any positions in either company.

Comments

# 1 bigsmallwood @ Jul 28

This is an interesting piece of info. Makes one wonder what would have happened if the takeover had happened...

# 2 luv_mist @ Jul 28

I was thinking that though we see this stuff how it is now, we truly wouldn't know the positive or negative effect it would have seriously had. I desperately wish I could know how it would turn out. Of course, when the market "bounces back," will those stocks tell a different story? It's amazing how this stock market determines most though.......