- Shares of video game publisher Take-Two Interactive spiked on Wednesday.
- The stock price jumped because of a rumour that Sony is engaged in “advanced board level discussions to acquire Take-Two Interactive in a mostly cash deal.”
- That rumour, however, is “purely unconfirmed market speculation that is making the rounds,” according to the analyst quoted in the report.
- Additionally the rumour doesn’t make any sense.
Consider this theoretical scenario: The next “Grand Theft Auto” game is exclusive to Sony’s PlayStation.
It would be a huge coup for Sony’s PlayStation, and a major loss for Xbox and PC players. It’s also extremely unlikely, just like the rumour that would facilitate such a scenario.
On Wednesday, Marketwatch reported that shares of “Grand Theft Auto” publisher Take-Two Interactive leapt 4.7% due to rumours that Sony was in “advanced board level discussions to acquire Take-Two Interactive in a mostly cash deal.”
There’s one especially good reason this doesn’t make much sense, and it’s the same reason that Sony’s unlikely to buy any of the other major game publishers, like Ubisoft, Activision, EA, or Bethesda Softworks.
Take-Two Interactive, like many other major game publishers, is a business dependent on making games for every platform, including Microsoft’s and Nintendo’s. If Sony were to buy Take-Two Interactive, it would be to keep its games for the PlayStation platform.
Thus: “Grand Theft Auto” would be a PlayStation exclusive.
That makes any such acquisition a poor business choice.
Not only would the publisher cost Sony a ton of money up front to buy, but it would be difficult to make money back on the investment when it’s suddenly limited to developing for only PlayStation consoles.
Moreover, the source of the rumour is “purely unconfirmed market speculation that is making the rounds.” That’s according to Joel Kulina, head of technology and media trading at Wedbush Securities. Kulina is quoted in the Marketwatch report as the source of the rumour.
When Business Insider reached Kulina for comment, he directly refuted the rumour and denied attribution.
“I did not write anything. This is purely unconfirmed market speculation that is making the rounds. I am not the source of this story in any regard,” he said in an email.
According to Kulina, he sent out a trading note with the subject line, “TTWO M&A CHATTER MAKING ROUNDS,” followed by, “NO SOURCE **UNCONFIRMED**.”
Perhaps more importantly, the rumour in the note put Take-Two’s sale price at $US130 per share – a nearly $US40 jump per share over the current asking price.
Despite the rumour making no sense, and having “NO SOURCE,” the mere possibility of a potentially massive jump from acquisition was enough to send Take-Two’s stock price leaping – a just-in-case move that could result in a massive payday for anyone who got in while the price was low.
But that doesn’t appear to be the case. Instead, what’s much more likely to happen is Sony doesn’t buy Take-Two Interactive.
A Sony representative told Business Insider, “We do not know where the rumour is coming from, but there is no such plan.” and a Take-Two representative told Business Insider, “We do not comment on rumours or speculation.”
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