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Another Take-Two Catalyst Coming Up

Take Two (NASDAQ:TTWO) has had a rather rough time after releasing GTAV. GTAV beat all expectations, but the stock fell victim to the "sell the news" phenomenon. And now, given the prospects for Electronic Arts (EA) and Activision (ATVI), as well as the bad numbers from GameStop (GME) and Best Buy (BBY), the stock is suffering again. Still, that might be about to change.

Short term risk

The main short-term risk facing Take Two is the fact that Electronic Arts might lay an egg. This is so because of how badly EA's Battlefield 4 franchise is performing.

At the same time, we know for a fact that the transition from old generation gaming consoles to the new generation (XBox One, PS4) is leading to lower software sales. The installed bases on the new consoles are still small, whereas people are no longer investing in games for the old consoles, except for the most powerful franchises - which include Grand Turismo 6 on the PS3, as well as GTAV - thankfully, Take Two's - on the XBox 360 and PS3.

While Take Two is not the main victim of these developments, investors can always generalize to the sector and punish Take Two.

The catalyst

In spite of these short term risks, I believe there's a massive catalyst emerging for Take Two. The catalyst is the launch of GTAV on the PC. There are already rumors surfacing about this near-term launch, including:

  • A video on YouTube depicting a GTAV developer edition running on a PC, including video options which you'd only find in a PC version;
  • The fact that Take Two asked to take down the video;
  • And a rumored date for the launch: March 12.

The date is important, as it would still fall in the March quarter. As we will see, there

This article was written by

Paulo Santos profile picture
24.19K Followers

Portuguese independent trader and analyst. I have worked for both sell side (brokerage) and buy side (fund management) institutions. I've been investing professionally for around 30 years.

I have a Marketplace service here on Seeking Alpha called Idea Generator that's focused on deep value, real-time actionable ideas based on valuation and catalysts. The Idea Generator portfolio has beaten the S&P 500 by more than 74% since inception (2015).

I can be reached at paulo.santosATthinkfn.com.

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