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Greenlight Capital's fourth quarter positions

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Part 3
Greenlight Capital's fourth quarter positions PART 3 OF 8

Why Greenlight Capital bought stake in Take-Two Interactive

Greenlight Capital and Take-Two Interactive

Greenlight disclosed a 0.99% new position in Take-Two Interactive (TTWO), a developer, marketer, and publisher of interactive entertainment for consumers around the globe. The company develops and publishes products through its two wholly owned labels, Rockstar Games and 2K. Why Greenlight Capital bought stake in Take-Two Interactive

Take-Two Interactive Software reported strong sales and earnings for 3Q 2014. Profit almost doubled, to $578.4 million or $4.69 earnings per share, from $70.9 million or $0.66 earnings per share in the same period a year ago. The company’s revenue for the quarter reached $1.86 billion from the $415.8 million revenue recorded last year. These results were driven by robust holiday demand for Grand Theft Auto V, the franchise record-breaking launch of NBA 2K14, the successful release of WWE 2K14, and strong growth in digitally delivered revenues led by Grand Theft Auto Online. Take-Two was the top video game publisher of 2013, according to the NPD Group, underscoring the company’s positive momentum over the past year. The company said Grand Theft Auto V has sold more than 32.5 million units.

Why Greenlight Capital bought stake in Take-Two Interactive

Take-Two raised its fiscal 2014 outlook, but fiscal 4Q guidance came in below current Street estimates. For the full year, Take-Two forecasted adjusted earnings per share of $4.15 to $4.25 and net revenue of $2.35 billion to $2.38 billion. The company expects to break even or earn up to $0.10 per share in 4Q on adjusted revenue of $170 million to $200 million. Analysts lowered estimates for the company because of the lack of significant new titles. A Piper Jaffray analyst noted, “Strong results during the December quarter with mixed March quarter guidance could suggest [the online version of GTA] is not monetizing at as high a rate as some expected.”

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