The transition to this board was smooth, thanks for allowing us to continue our investment threads here, Rod.  Thanks also go to Jester for finding it and coordinating the transition.

Hey Perry! I bought some TTWO recently also. 2 buys low to mid 24's. Not sure about the buyout (they should have been bought out by either ATVI or EA for years, right?), but I think their earnings have to be solid which could move the stock 10-20% from here (not all at once right after earnings).

I'll probably sell at the money puts in TTWO pre-earnings, around $25. Markest response to ATVI and EA has been ebullient. GTAV is still charting strongly, which is free profit. It was #2 in April NPD behind MKX, ahead of BFH. Evolve bombed but that's not a huge deal. They also cut some costs with the closure of 2K Australia a month ago. We have to assume there will be something for this holiday season. I wouldn't be surprised to see an RDR re-master, then an RDR sequel in 2016. I think it's getting a bit late to start talking about RDR sequel for holiday season, or more specifically a bit late to announce it and actually deliver it on time. Historically, Zelnick doesn't announce Rockstar games at earnings, but he can hint at something via guidance and the Q&A.

Alas, no weekly TTWO options, but the monthly expires June 19, and E3 is June 16-18 (Wed-Fri), so that's likely to provide support then.

I'm considering selling TTWO going into earnings. I don't see how analysts are coming up with $1.29 next year. Red Dead is definitely not making the FY and Z is not shy about shocking the market with guidance. But the stock is already down 20% this q so I'm hesitant about getting rid of a long term position (and I'm kicking myself for not selling in the 30's).  Last year at this time, this is what happened:

• Stock was UP about 7% relative to the market in the Q
• .21 versus .09 BEAT
• Q1 and FY guidance miss: Q1 - (.30) v (.10) MISS; FY - .93 v. 1.08 MISS
• Result: 6% drop in share price (which was erased in subsequent months)

It's always the same with TTWO. They beat and guide down, quarter after quarter. Look at last year's guidance of .93. At this point after only three quarters, they've already made $1.50, so they'll probably double their guidance from last year. The eps numbers are impressive because they're based on the higher share count. So from a valuation standpoint, the shares are cheap if you assume GTA will do this kind of performance again (it's incredible how much earnings this latest GTA has produced, even after Rockstar's enormous cut).  Still, management has established a pattern of being very conservative with guidance, so I'm alarmed by analysts at $1.29 for the next FY. Today:

• Stock is down 20% relative to market in the Q
• Average beat last 4 q's is .18 so lets say they BEAT by .18
• Q1 and FY analysts are high so let's say they guide for weak Q1 and $1.00 FY
• Result? What do you think?

If results are how I see it, I think the stock reaction could go both ways

 

If any game sells 5 million copies over its life time, in most cases you can call that a win. A lot of games sell a lot less than that even and still call themselves a success.

Well, how about 5 million in just one territory? And we aren’t even talking about the US. What about right here in the UK? Because Grand Theft Auto V has done just that across all platforms.

These numbers come from GfK, and only account for physical sales. That means that there will have been many, many more bought digitally. It also means all the purchases of the newly released PC versions through Steam don’t count towards this tally.

Not that any of this is a huge surprise. Grand Theft Auto 5 being really popular shouldn’t shock anyone. But this is really a huge success that will shape the landscape of all of games for years.

bleedingcool.com/20...alone/

 

 

I came across this article today.  I couldn't find the source on GFK, so take with a grain of salt:

 

 

 

 

 

GTA sales are incredible. No doubt about it. But the trend is that each new GTA has taken longer and longer to create. I just read one analyst talking about 2016 for the next GTA. What? Not gonna happen. At earliest, it will be 2018, and based on previous trends it will be 2020. If that sounds crazy, it shouldn't if you note how long it took to make GTAV. The reason it's such an amazing game is what it takes to create it, and consumer expectations keep rising.

Still, the valuation of the company is low. If we assume 5 years, then the way I value TTWO is roughly like this... 

2013 $2.75 (when you account for tax); 2014 $1.75; 2015 $1; 2016 $2 (RDR); 2017 $1; 2018 $3 (GTA)  ~~~~ averages out to $1.92

at impatient market valuation (10x EM), it's a $28 stock, but at ATVI valuation (20x EM) it's a $47 stock

Even the risk of GTA taking another couple years doesn't knock that valuation all that far. I get about $25 and $40. The market doesn't care to wait so long. That's why I think the bigger publishers need to either buy them out or it's gonna be a loooong wait.