Take Two to lose Board of Directors

[esmeet]

In what could be a fatal blow to Take Two, it appears a shareholder group owning some 46% of the shares will present their own proposals at the annual meeting tomorrow (March 29th) and will dismiss all of the current directors on the board. If they provide their own directors and replace management, this could be a sign of one of two things: (1) Take Two will be cut up and sold in pieces to liquidate and recover investments of shareholders in that group [which is highly likely] or (2) newly installed management will be given some time to turn the ship around and pump out another blockbuster game (i.e., All-Pro Football 2k8).

Like everyone in these forums, I'd like to see Take Two stay strong and compete head-to-head with EA Sports on their sports video games (I don't care about GTA), but I'm beginning to believe that the days of 2K Sports - at least as we know it - are numbered.

Here's the latest article in the WSJ:

http://online.wsj.com/article/BT-CO-20070328-712088.html?mod=hps_us_my_companies

[fatman]

although what you say is true, I don't think it will affect the release of APF.

The game must be very far along, and I doubt it would get ditched in most scenarios.

[thePLAGUE]

In what could be a fatal blow to Take Two, it appears a shareholder group owning some 46% of the shares will present their own proposals at the annual meeting tomorrow (March 29th) and will dismiss all of the current directors on the board. If they provide their own directors and replace management, this could be a sign of one of two things: (1) Take Two will be cut up and sold in pieces to liquidate and recover investments of shareholders in that group [which is highly likely] or (2) newly installed management will be given some time to turn the ship around and pump out another blockbuster game (i.e., All-Pro Football 2k8).

Like everyone in these forums, I'd like to see Take Two stay strong and compete head-to-head with EA Sports on their sports video games (I don't care about GTA), but I'm beginning to believe that the days of 2K Sports - at least as we know it - are numbered.

Here's the latest article in the WSJ:

http://online.wsj.com/article/BT-CO-20070328-712088.html?mod=hps_us_my_companies


I am assuming " [which is highly likely] " " (i.e., All-Pro Football 2k8)." is just your added oppinion, correct?

[shad_moss93]

In what could be a fatal blow to Take Two, it appears a shareholder group owning some 46% of the shares will present their own proposals at the annual meeting tomorrow (March 29th) and will dismiss all of the current directors on the board. If they provide their own directors and replace management, this could be a sign of one of two things: (1) Take Two will be cut up and sold in pieces to liquidate and recover investments of shareholders in that group [which is highly likely] or (2) newly installed management will be given some time to turn the ship around and pump out another blockbuster game (i.e., All-Pro Football 2k8).

Like everyone in these forums, I'd like to see Take Two stay strong and compete head-to-head with EA Sports on their sports video games (I don't care about GTA), but I'm beginning to believe that the days of 2K Sports - at least as we know it - are numbered.

Here's the latest article in the WSJ:

http://online.wsj.com/article/BT-CO-20070328-712088.html?mod=hps_us_my_companies

Dude, I love 2ksports games too, but that line about "I don't care about GTA" f**k that, GTA IV is going to be great. Cant wait till the trailer comes out tomorrow.(6PM)

[esmeet]

Dude, I love 2ksports games too, but that line about "I don't care about GTA" f**k that, GTA IV is going to be great. Cant wait till the trailer comes out tomorrow.(6PM)

That's fine if you like GTA, there are millions of fans who do like it. Though I like the idea of free-roaming games with lots of user autonomy, I have never played GTA and have no interest in the game's theme and storyline.

As for Take Two's next move after the shareholders remove the directors and top executives, my personal opinion is that they will give the firm 6 months to finish out production on GTA IV and All-Pro Football, but assuming those two games don't resurrect the firm (and I don't believe they will), then I think we'll see Take Two dissolved within the next 12-18 months.

You may ask why I don't believe those two blockbuster games will resurrect the firm. First, GTA III sold 12 million copies in the first 3 months in 2001. Because the game is only being made for next-gen consoles, projected sales for that same time period for GTA IV are only 5 million. Second, no matter how revolutionary or innovative All-Pro Football is, it's still competing head-to-head with Madden, and I don't expect to see the millions of defectors from EA Sports that would be required to make a significant dent in the Madden market share.

I do hope that some new directors and upper executives will have a new vision that will seek to build the Take Two franchise as opposed to dismantling it, though disgruntled investors with firms in financial distress tend to be short-sighted and are generally more concerned about recouping their investment. -- In part, I have trouble understanding how Take Two is struggling...they have the best-rated NBA game, the better-rated NCAA Basketball game, some incredible action and role-playing games (e.g., GTA, Oblivion), the only third-party MLB game, a competitive hockey game, and a handful of other decent titles. Here's to hoping that their corrupt management and directionless board have been the problem, and let's hope those directors and executives chosen to replace them come out swinging for the fences.

[newgen1]

I just listened to the TT stockholders meeting that just ended. The whole thing lasted only 38 minutes. They did vote to replace some members of the board (6) but this is common among corporations as old members leave and new members come on. Everything was very business like and calm. There was no shareholder revolt, or any hint of breaking up the company at all. See how rumors get started for nothing.
They did take a vote on social responsibility for the corporate officers thereby holding the officers responsible for their actions if they do anything shady.
Other then that no fireworks at all!!
Bring on APF and long live 2K Sports!!

[thePLAGUE]

good...ESMEET, you are so pessimistic it hurts my eyes to read your posts.

[Akuma2000]

I just listened to the TT stockholders meeting that just ended. The whole thing lasted only 38 minutes. They did vote to replace some members of the board (6) but this is common among corporations as old members leave and new members come on. Everything was very business like and calm. There was no shareholder revolt, or any hint of breaking up the company at all. See how rumors get started for nothing.
They did take a vote on social responsibility for the corporate officers thereby holding the officers responsible for their actions if they do anything shady.
Other then that no fireworks at all!!
Bring on APF and long live 2K Sports!!

Listened from where ??

[eselv73]

Yeah, how did you listen to it??

[totalownership]

Also there's a big "IV" on xbox's front page advertising GTA IV. Don't know if it was up there before today as I didn't see it but it's there. Not the whole page but you won't miss it. So APF 2K8 I'M WAITING FOR YOU BABY!!! CAN'T WAIT TILL YOU COME HOME!!!!!

[halo21]

Listened from where ??

He was probably at the meeting.

[e0820]

Yeah, how did you listen to it??

They had it online, you had to register though. Really glad that 2k Sports is still in one piece (for now)

[eselv73]

I was waiting for this meeting before buying a next gen console because I don't want anything to do with a videogame console without 2k sports.. just ordered a ps3 :)

[esmeet]

I just listened to the TT stockholders meeting that just ended.
The whole thing lasted only 38 minutes. They did vote to replace some members of the board (6) but this is common among corporations as old members leave and new members come on.
There were only six members on the board, so they replaced the entire board of directors, which is NOT normal. The CEO and Chairman of the board were both removed. Afterwards, the new board added a seventh member, who was one of the original independent directors. All of the major Take Two players (Chairman, CEO, etc.)were booted from the company.

Everything was very business like and calm. There was no shareholder revolt, or any hint of breaking up the company at all.
Did you expect people to start throwing things and lighting the room on fire? Of course things were business-like - this was a business meeting. And, yes, there was a shareholder revolt, that's how they took over the board and removed all of the previous directors. BTW, a shareholder revolt doesn't involve guns or violence (perhaps you expected a scene out of a GTA game), it involves votes of shares.

See how rumors get started for nothing.
I'm not starting rumors, I was just reporting what was going to happen - which, by the way, did happen.

They did take a vote on social responsibility for the corporate officers thereby holding the officers responsible for their actions if they do anything shady.
The reason they discussed this issue is because their former CEO just plead guilty to a stock options backdating scheme which defrauded the company (and investors). They were basically setting a precedent for the incoming CEO and directors.

Other then that no fireworks at all!!
Yeah, other than the fact that every major player at Take Two was essentially fired and thrown out of the company by the shareholders, there were no fireworks at all!

Bring on APF and long live 2K Sports!!
The new management did mention they will spend the next few months reviewing the company's financial information and making sure it's "pristine". They did state that they hope to retain the creative talent at the company (tough to do when the world is falling down around them) and that they don't have an exit plan (i.e., selling the company), but that's to be expected. They wouldn't talk about selling the company on day one or out in public...those discussions will be held behind closed doors and will happen over the next 6-12 months. -- I do agree with NewGen1 on one thing in his post - bring on APF, and long live 2k Sports! (We can hope, right?)

As for those who don't like my posts because of the "pessimistic" tone, I prefer to refer to it as "realism". Those who know me and watch my posts know that I'm a rational, level-headed person. I don't like the news any more than you guys, but I'm just reporting it as I see it.

Here's the latest WSJ article so you can all confirm the information for yourself:
http://online.wsj.com/article/BT-CO-20070330-705848.html?mod=hps_us_my_companies

[VC80]

Esmeet - if you've surfed around these boards at all, you know how difficult it is to have a thoughtful and informed dialogue. The peanut gallery runs the show.
Thanks for the info. Let's hope the programmers for APF treat the game like its the swan song for Take Two and put everything they got into it.

[fatman]

^^ good for you insulting everyone but yourself and trying to align yourself with 'the smart guy'

moving on, so lets discuss some possibilites here. I could be wrong, but I would think APF is 80% complete from development - I say that because if they release in mid july, that gives them under 3 months to complete the remaining 20%, debug, more playtesting, and finalize. after that they need to burn the copies, package and distribute among other things.
would anyone else agree that 80% complete is a fair estimate?

So with a brand new board, what are their options? I guess they could stay the course and follow the original plan for APF, and release in the summer business as usual.
They could sell-off the different divisions of the company, but that doesn't necessarily mean they wouldn't release the game even in the summer as planned, however a new parent company could can the whole project if they desire.

My main point is that with a game this far along, that should be a quality product, I would like to think that whatever happens (short of EA purchasing 2k sports) the game will still make it out. ...no?

[esmeet]

^^ I don't think they'll stop production on APF. I expect that we'll see the game come out on schedule. I'm not saying that APF will be scrapped or that it won't be released. As for percentage completion on the game, I'm not sure where they might be. (Though I must admit I'm nervous about the lack of screen shots and information.)

I do believe that 2k Sports is in some long-term danger of remaining as a viable entity. Though we might get APF 2k8, I'm more worried about 2k9 and the future of the company and the sports video game industry.

[slammerxt]

One HUGH question. How can the share holders have a revolt and rearrange the entire tire head without the top heads approval. Why do I ask this? Because the shareholders only control 46% of the stock, so even if they wanted change it would take the company true heads to allow something like this to happen. With the control of the stocks the heads of TT could tear it appart with out the rearranging of the board. Do any of you really understand how stocks work for a company?

[kcxiv]

if 2k folds, then in all seriousness all 2k8 will mean is this is the last football game we will ever play that isnt Madden. No other company will make a generic football game. It will be officially over. That would make me not even want to play 2k8 knowing its the last of it.

This is totally reminding me of the day pro wrestling died and Vince bought WCW and ECW. I havent watched much wrestling since.

[slammerxt]

Its kind of funny you say that, because more people are watching wrestling now than ever, because vince took over. Now I agree its different than it used to be, but Wrestling was going down the tubes and he got the masses to start watching it again. Sorry, off topic.

[esmeet]

Do any of you really understand how stocks work for a company?
Yes, do you?

As someone with a B.S. and M.S. in Accounting and who is working on a Ph.D. in Management, I would consider myself somewhat of an expert on "how stocks work for a company".

If you look at the company's filings with the SEC each year, you can see who really "controls" the company by looking at who owns the most shares. Though this group of shareholders leading the revolt held only 46%, all of the "inside" guys at Take Two combined (directors, CEO, CFO, COO, etc.) hold a total of only 2.9% of the shares. (No, that's not a typo...I said two-point-nine percent.) The rest of the shares are generally held in very small blocks by individuals like you and me. (The reason these groups own so much of Take Two is because they helped provide all of the funding that started the company, so they - not management - really "own" the company.)

Because the vast majority of the shares that are held by individuals and small shareholders are so diverse, they can't unify and vote for anything together (and just like in political campaigns, many of them don't vote). So, if one group holds 46% of the votes (and is unified and willing to vote all of their shares together) and goes against current management and directors who hold only 2.9%, then it's a slaughter in the making.

To understand how much power 46% is, consider that Bill Gates - the largest individual MSFT shareholder - only owns 9.7% of Microsoft stock, and all of the insiders at MS combined only own a total of 14%...the rest is held by mutual funds, investment banks, and millions of individuals around the world. Because ownership is so diverse, 10-14% is enough to really "control" the company. That said, 46% is more than enough to "control" Take Two.

(If you'd like to see Take Two's latest proxy filing with the SEC, here it is:
http://www.shareholder.com/Common/Edgar/946581/1104659-07-15033/07-00.pdf)

[fatman]

you can also search on edgar to see all of their public filings

[thePLAGUE]

ESMEET, we know TAKE2 could be in danger of getting torn in to pieces...We have been known this for months....My problem is your tendency to use a pessimistic tone in your posts...Its 50/50 as far as anybody on the outside is concerned. Its very likely that the new blood on board at the company will energize the 2k brand or otherwise...You sound like the folks at Fox news...Shut the fawk up and fall in line...Untill u get invited to Take2 offices for a briefing, save us your morbid commentary.

ya!

[Bowdown]

Plain English:

http://www.gamespot.com/news/6168306.html?om_act=convert&om_clk=newstop&tag=newstop;more;4

Nothing on APF

[newgen1]

There were only six members on the board, so they replaced the entire board of directors, which is NOT normal. The CEO and Chairman of the board were both removed. Afterwards, the new board added a seventh member, who was one of the original independent directors. All of the major Take Two players (Chairman, CEO, etc.)were booted from the company.


Did you expect people to start throwing things and lighting the room on fire? Of course things were business-like - this was a business meeting. And, yes, there was a shareholder revolt, that's how they took over the board and removed all of the previous directors. BTW, a shareholder revolt doesn't involve guns or violence (perhaps you expected a scene out of a GTA game), it involves votes of shares.


I'm not starting rumors, I was just reporting what was going to happen - which, by the way, did happen.


The reason they discussed this issue is because their former CEO just plead guilty to a stock options backdating scheme which defrauded the company (and investors). They were basically setting a precedent for the incoming CEO and directors.


Yeah, other than the fact that every major player at Take Two was essentially fired and thrown out of the company by the shareholders, there were no fireworks at all!


The new management did mention they will spend the next few months reviewing the company's financial information and making sure it's "pristine". They did state that they hope to retain the creative talent at the company (tough to do when the world is falling down around them) and that they don't have an exit plan (i.e., selling the company), but that's to be expected. They wouldn't talk about selling the company on day one or out in public...those discussions will be held behind closed doors and will happen over the next 6-12 months. -- I do agree with NewGen1 on one thing in his post - bring on APF, and long live 2k Sports! (We can hope, right?)

As for those who don't like my posts because of the "pessimistic" tone, I prefer to refer to it as "realism". Those who know me and watch my posts know that I'm a rational, level-headed person. I don't like the news any more than you guys, but I'm just reporting it as I see it.

Here's the latest WSJ article so you can all confirm the information for yourself:
http://online.wsj.com/article/BT-CO-20070330-705848.html?mod=hps_us_my_companies

You make some good points even though they are grim. From all the news reports I’m seeing its going to take a while to re-org the company. We all know GTA4 is going to bring in a ton of money for TT when it’s launched and is in no way in jeopardy. The 2K sports division is gaining positive reviews and reputation in the gaming community and with marquee titles in the NBA, & MLB. Hopefully they are profitable for the company. With gaming surveys that constantly vote 2K sports over EA is something to build on and not throw away. That kind of good will is very hard to come by. I’m convinced TT is going to exist as a viable software company it’s just a matter of what titles it decides to carry forward for its future. There are many other software titles the company can look at and decide what they want to do with.

Currently TT is locked in some long term licensing agreements and they will have to renegotiate but that will take some time to do.

http://biz.yahoo.com/ap/070330/take_two_ahead_of_the_bell.html?.v=1

I’m optimistic that we will have 2K sports titles for years to come.
Let’s see what happens in the coming months.

More info on the meeting below!!
http://biz.yahoo.com/ap/070330/take_two_shareholder_revolt.html?.v=3

[kcxiv]

Its kind of funny you say that, because more people are watching wrestling now than ever, because vince took over. Now I agree its different than it used to be, but Wrestling was going down the tubes and he got the masses to start watching it again. Sorry, off topic.
is that really true? i would love to see numbers that support that. I havent honestly watched wrestling in a few years. That whole WCW/WWF combining at the time it did, was just horrible.

[newgen1]

For Sony's (SNE - Cramer's Take - Stockpickr - Rating) PlayStation 3, Take-Two plans to release Grand Theft Auto IV in October and has two sports games currently available.

Grand Theft Auto IV is likely to be a hit, but in the sports-games arena, Take-Two is competing against industry giant Electronic Arts (ERTS - Cramer's Take - Stockpickr - Rating), which has the lion's share of that market.

"Take-Two already has most of the addressable market for sports games it can capture," says Pachter.

Though Lazard Capital's Sebastian says there's still room for Take-Two to grow in the sports category, the company has yet to prove that it is not a one-trick pony and can go beyond the Grand Theft Auto series.

Proving this will take more than a rearrangement of the chairs at the top. Take-Two will need to redefine itself, find its niche in the video-game business and stick to it.

[newgen1]

Yes, do you?

As someone with a B.S. and M.S. in Accounting and who is working on a Ph.D. in Management, I would consider myself somewhat of an expert on "how stocks work for a company".

If you look at the company's filings with the SEC each year, you can see who really "controls" the company by looking at who owns the most shares. Though this group of shareholders leading the revolt held only 46%, all of the "inside" guys at Take Two combined (directors, CEO, CFO, COO, etc.) hold a total of only 2.9% of the shares. (No, that's not a typo...I said two-point-nine percent.) The rest of the shares are generally held in very small blocks by individuals like you and me. (The reason these groups own so much of Take Two is because they helped provide all of the funding that started the company, so they - not management - really "own" the company.)

Because the vast majority of the shares that are held by individuals and small shareholders are so diverse, they can't unify and vote for anything together (and just like in political campaigns, many of them don't vote). So, if one group holds 46% of the votes (and is unified and willing to vote all of their shares together) and goes against current management and directors who hold only 2.9%, then it's a slaughter in the making.

To understand how much power 46% is, consider that Bill Gates - the largest individual MSFT shareholder - only owns 9.7% of Microsoft stock, and all of the insiders at MS combined only own a total of 14%...the rest is held by mutual funds, investment banks, and millions of individuals around the world. Because ownership is so diverse, 10-14% is enough to really "control" the company. That said, 46% is more than enough to "control" Take Two.

(If you'd like to see Take Two's latest proxy filing with the SEC, here it is:
http://www.shareholder.com/Common/Edgar/946581/1104659-07-15033/07-00.pdf)


The quote below is from the new CEO..... Sounds like he thinks the 2K sports is a good idea and something to build on!!! Iguess we will have to see!!

Take-Two will have to build out other businesses and the company is likely to be more aggressive around its sports division, 2K Sports, says Zelnick. "I think 2K Sports is a great idea," he says