If I remember correctly, most of MWY's runnup was due to the few buyers of the float shares thinking Redstone was going to buy the whole thing, share by share, on the open market. The runnup was solely (IMO) based on buyout expectations....TTWO has multiple large holders, who seem to believe in the long-term story.
In a nutshell, I think MWY's stock behaved as rationally as one can expect a single 90-year old to act. TTWO's movement is the result of a handfull of large holders...they (probably) have a variety of exit strategies and concepts of what TTWO's intrinsic value is....when one of them decides to sell, another may be willing to buy the shares. The moment Redstone decided to stop buying, there was no one left to play the part of the greater fool....just a bunch of retail holders on margin hoping Redstone would buy the last shares for $50.
I am not implying that it won't go down. It might come off that way because ttwo is like my favorite football team... as you can see I even have their name as my handle.
The mwy situation might be different. Maybe the ttwo holders want to make money or statistical return to attract new clients and then make more money. Maybe sumner is a crazy old man who doesn't need money and wasn't trying to make a killing off mwy. Obviously the same volatility can happen to ttwo If no one wanted the shares and holders want to sell but its not likely that will happen until (if) gta fails without enough magic to replace it. And unless a drop happens overnight (like twice last summer) it should be a great trade riding it down because it can't go down without making new lows.
Sounds to me like you're the one squirming. I am the essence of calm. Was my best case scenario for Manhunt 2 not bullish enough for you? Perhaps you can put forth a case for how a delay costs them nothing?
What about Redstone owning 90% of MWY and it going from $21 to $6, and then giving up any gains since then?
Not arguing with you, I agree the current ownership situation is critical to the price movement. I'm just wondering if the implied statement that the stock won't go down because of that ownership is valid, or is the MWY situation totally different?
the only way the stock price will move down is if these guys want it to. They have 100% of the shares. They decide who can borrow their shares to short. Nine of them bought a total of 25M shares over they last year (1/3 of the total shares). A couple of them took over the company. So if you think the price moves emotionally or on some interpretation of some number, I think you are wrong. I am not saying I know where the price is going I am saying that its IMO better to watch it and how they play their cards instead. I should probably just shut up and keep this stuff to myself.
agree with jester, however I'm hopeful that Darkness and Bioshock may be able to take up the slack over the ocurse of the year, leaving more GTA IV for FY08. One thing about Manhunt, they definitely want it out there before the end of summer, once Halo 3 and GTA IV come out, the PS2 will die off quick and so will sales of near full price games
Guidance may have been low, I don't know, but I don't believe they were counting $0 revenue for this game. I do think the ratings response has come as a surprise to them.
Will the stock take a hit? Who knows, it's not exactly trading on fundamentals. The thing is, the weaker that games like F4 and Manhunt 2 look, the more units of GTA4 they need to ship this year to meet their recent guidance, and that means lower FY08 earnings. They may have to ship close to 4M GTA this year to meet guidance, and at historical attach rates that only leaves about 3M units for FY08.