The New York Times' Gretchen Morgenson (sub. req.) looks at stock ownership of video game publisher Take-Two Interactive (ticker: TTWO), whose revenues have fallen substantially in the past six months.
Morgenson notes that fund company 'OppenheimerFunds owns a staggering 26 percent of Take-Two; Fidelity owns almost 15 percent. They have added to their positions recently, even as Take-Two's fortunes have flagged. The next largest holder is a hedge fund group, with 6.5 percent of outstanding shares.' Morgenson believes that 'when a fund company, acting as a fiduciary to its investors, owns more than a quarter of a concern's shares, that's a mighty big gamble.'
Indeed. And while Morgenson's focus is on the prudence of that gamble from a fund investor's perspective, anyone who owns TTWO independent of a mutual fund should be wary as well. Should Oppenheimer, for example, choose to unload even 10% of its TTWO holdings amidst the company's current sales slump, that would consistitute more than the average daily volume (1.7 million shares) traded in the stock. Even spread over time, the downward pressure would be significant.
TTWO 1-yr. chart: