In a note to the industry entitled ‘We like Take 2’s games, but are not optimistic about its profit potential,’ Pachter also states: “We think that continuing risk from the ongoing New York County D.A. investigation and lack of visibility into a return to profitability will limit the company's multiple.”
“In order to generate sustainable profits, Take-Two must reduce the number of money-losing SKUs it produces each year,” he adds. “As stated above, we believe that the company has a handful of bona fide successes, and a larger number of losers. If the company were able to scale back its spending on the losers, we think it could generate sustainable profits at a high level.”
Advertisement
