Analyst: ‘Sell your Take 2 shares’

The Wedbush Morgan analyst insists that while the next Grand Theft Auto title will generate significant profits, he is less optimistic about “the profit potential from it sports business and from ‘everything else.’”

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.”


Tags: Take 2 , gta , pachter

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