Electronic Arts - Takeover begins

[Sayyiduna]

This all depends on Take-Two and what safeguards the put in place to prevent hostile takeovers, the way the stock market works (I'm a TTWO Shareholder, but anyone can be) depends on the amount of "Common" shares. When a company is made they make a number of stock available (this varies) but let's use an example of 100 million shares (a bit high). This is where the people who own the company or have an interest in preserving it (such as Dan and Sam Houser or other people who "founded") will give themselves a typically large sum of shares which are called "Preferred Shares" . If they had taken precautions to stop themselves from being acquired (which every company should) they would have split the Preferred shares to the various members to equal out 55% or more of the company, so unless the founding members agree to sell their preferred shares to EA, they are sh*t out of luck. However, if they had only released a small number of preferred shares to their initial investors, this puts the company almost entirely into "Common" stock.

 

Unfortunately, Common Stock means any regular Joe can buy up as much of the company as he would like (so long as there's still shares to be bought) and he has enough money of course. Judging by the fact that Take-Two is holding a shareholder meeting, and they have already made their preferred investors well aware of the fact that GTA is the biggest game this year, and that 26 that EA offered won't be such a premium when their second quarter fiscal report comes in (basically, they let the world know they made truckloads of money, and their stock becomes more valuable) . In addition to those 2 major obstacles, they also have the recent announcement of Bioshock 2, which is further increasing the value of ttwo shares, I don't see EA getting ANYWHERE with this takeover attempt.

 

So I say, don't worry about it, Take-Two has a very low chance of getting taken over in a hostile manner, everyone knows what GTA means and what it will be once it's out on the market, those great ideas and successful games are what got those initial investors to take a risk on the company and get that preferred stock, so relax, enjoy, and wait for the game!

[crackdawg]

 

This all depends on Take-Two and what safeguards the put in place to prevent hostile takeovers, the way the stock market works (I'm a TTWO Shareholder, but anyone can be) depends on the amount of "Common" shares. When a company is made they make a number of stock available (this varies) but let's use an example of 100 million shares (a bit high). This is where the people who own the company or have an interest in preserving it (such as Dan and Sam Houser or other people who "founded") will give themselves a typically large sum of shares which are called "Preferred Shares" . If they had taken precautions to stop themselves from being acquired (which every company should) they would have split the Preferred shares to the various members to equal out 55% or more of the company, so unless the founding members agree to sell their preferred shares to EA, they are sh*t out of luck. However, if they had only released a small number of preferred shares to their initial investors, this puts the company almost entirely into "Common" stock.

 

Unfortunately, Common Stock means any regular Joe can buy up as much of the company as he would like (so long as there's still shares to be bought) and he has enough money of course. Judging by the fact that Take-Two is holding a shareholder meeting, and they have already made their preferred investors well aware of the fact that GTA is the biggest game this year, and that 26 that EA offered won't be such a premium when their second quarter fiscal report comes in (basically, they let the world know they made truckloads of money, and their stock becomes more valuable) . In addition to those 2 major obstacles, they also have the recent announcement of Bioshock 2, which is further increasing the value of ttwo shares, I don't see EA getting ANYWHERE with this takeover attempt.

 

So I say, don't worry about it, Take-Two has a very low chance of getting taken over in a hostile manner, everyone knows what GTA means and what it will be once it's out on the market, those great ideas and successful games are what got those initial investors to take a risk on the company and get that preferred stock, so relax, enjoy, and wait for the game!

Let's hope they are protected. I see there shares going up at least $10 after GTA IV circulates in retail. Also like they said pre-orders are way above expectations.

 

Also let's hope most of there preferred share holders aren't boring. I'd imagine they're like bank CEO's and rich kids.

Edited March 15, 2008 by crackdawg