Take-Two dips after announcing plans to sell $1 billion of new stock
A “GTA 6”-less year ahead continues to weigh on gaming giant Take-Two. The publisher on Tuesday announced plans to sell $1 billion of its stock.
Its shares were down nearly 4% in premarket trading.
The company didn’t exactly spell out why it needs the cash, other than saying that it “intends to use the net proceeds for general corporate purposes, which may include the repayment of outstanding debt and future acquisitions.” Given that it was previously expecting this fiscal year to be boosted by what many believe will be the biggest game of the decade, though, one could hazard some guesses.
When Take-Two reported earnings last week, its fiscal year sales outlook came in about $2 billion below analyst expectations, sending shares ticking down. Still, the stock is up more than 25% year to date and has recovered its “GTA” delay-induced losses from earlier this month.
From a shareholder-dilution perspective, it’s not a bad time for Take-Two to be issuing stock — even with the drop Wednesday, shares are still near an all-time high, which means less stock will need to be created in order to raise the $1 billion.
