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After going through the conference call transcript on Take-Two (TTWO) it appears obvious that the new management is still trying to figure things out, which means any forecasts it makes shouldn't necessarily be any more credible than those of the preceding regime.

One of the first things the new guys say they figured out, in less than two weeks on the job, is that the sports business is "challenging" and, as a result, won't be profitable by the end of the calendar year, as prior management suggested a mere six weeks ago. (The fiscal year ends October 31.)

Furthermore -- again, with less than two weeks on the job with a temporary CFO of than one week -- second quarter revenues will be 25% lower than a year earlier. But not to fear: The bottom line will be flat with a year ago and full year break-even guidance won't be changed.

Herb's Hook: How management with such short tenure can offer any guidance is baffling. I understand their desire for "transparency," but in this case they would have been better off wiping the slate clean by eliminating all prior guidance and suspending guidance altogether until they firmly have their arms around the situation, which they say will take at least 100 days.

Even more baffling is how much the stock trades as if they've already got it figured out. Just remember, with the stock at $20, there are plenty of bearish analysts whose valuation before the latest update thought the stock was worth in the low teens, at best.

There was a hint on the call that the company would consider selling its "non-core" business, such as distribution, which drove 42% of last quarter's revenue and 14% of its profits. The bigger question: Who would buy it? Bigger yet: Who needs it? It's not as if the distribution business hasn't been rumored to be for sale for well over a year.

The beat goes on...and so does this saga!

Full Disclosure: As all of my columns state, I don't own or short individual stocks, nor do I invest in hedge funds.

TTWO 1-yr chart:

Source: Take-Two Conference Call: Why Did New Management Bother With Guidance?