After last night’s shock, Take-Two Interactive’s stock plummeted. The gaming stock is currently trading at around $90, down nearly 20%. The reason for this can quickly be found. Because yesterday evening the American company published its quarterly figures. Take-Two had to withdraw its forecast for the current fiscal year, which ends on March 31, 2023. In the most recent second quarter, according to the game developer’s accounts, there was also a loss that was well above analysts’ expectations. In the following article, investors can find out how to handle Take-Two stock and why a new NFT game could be an exciting opportunity for investors willing to take risks.
Quarterly figures disappointing, full-year forecast revised
On Monday evening, Take-Two Interactive released figures for the latest quarter from July to September, which is the second quarter of the company’s fiscal year. Although it increased revenue by 62%, that’s thanks to its acquisition of mobile gaming company Zynga, which it bought earlier this year for just under $13 billion. As operating costs rose significantly and at $932 million were well above forecasts, profits are also worse. Profitability leaves a lot to be desired, and Take-Two Interactive returned a loss of $1.54 per share last quarter, despite forecasts of just $1 per share.
As a result, the management also had to withdraw the forecast for the entire financial year. The loss will be more than 50% higher than originally expected. Those responsible cite changing priorities, the macroeconomic environment and high currency fluctuations.
“We now expect to deliver net bookings of $5.4 to $5.5 billion in fiscal 2023. Our reduced forecast reflects changes in our pipeline, currency fluctuations and a more cautious view of the current macroeconomic backdrop, particularly in mobile.”
Take-Two stock chart hit hard: support at $84.41
Technically, Take-Two had to let go of the relevant resistance area recently. Several tests failed to break out of the resistance level. The massive, high-volume slide after yesterday’s forecast cut could now lead to a test of the multi-year lows around $85. If sales continue to rise, it will at least lead to an increasingly favorable valuation of Take-Two Interactive stock, according to P&L.
Countercyclical investment in Take-Two stock
This can make a countercyclical investment in the well-known game developer exciting. Despite the current challenges, games are still one of the largest media markets in the world. As one of the largest companies in this segment, Take-Two has well-known brands such as WWE 2K, GTA or BioShock. The brands represent a significant moat – hardly an example could illustrate this better than the success of GTA over 20 years after its initial development.
Take-Two looks to the future and continues to grow as one of the most innovative and efficient companies in the gaming market. GTA 6 in particular should continue to boost sales in the coming years.
“Take-Two has a proven strategy and consistent track record of success, driven by our core principles: we strive to be the most creative, the most innovative and the most effective entertainment company in the world. As we strive to capitalize on the many opportunities, that lies ahead, we are committed to creating significant long-term value for our shareholders.”
The current cheap valuation could also open the door to takeovers or activist investors, as management or families do not hold significant stakes. The largest shareholders are BlackRock and Vanguard – if other companies want to make an acquisition, it should be relatively easy.
New NFT game as an alternative: Buy now in Presale Calvaria (RIA).
Anyone who doesn’t believe Take-Two is capable of an operational turnaround at the moment and also doesn’t want to catch a falling knife in terms of chart technology can take a look at other assets looking to benefit from the growth as well of the gaming market. Med Calvaria (RIA), a new NFT trading deck is currently in presale – the fourth of ten presale phases is now well underway. Due to the sharp price increases after each stage, from currently $0.025 to $0.055 at the end of the pre-sale, book profits of over 100% are still possible before the ICO – an achievement that Take-Two shareholders will have to wait for.
There is no doubt that there are always risks associated with a crypto pre-sale. But Calvaria pursues big ambitions and, according to its own statement, would like to open up the conventional game market by attracting players with a smartphone game for free and then smoothly convert the players to the P2E variant.
Here directly to the Calvaria Presale