Filed under: Deals, Good news, Industry, Microsoft (MSFT), Yahoo! (YHOO), Electronic Arts (ERTS)

Take-Two Interactive (NASDAQ: TTWO) announced that its ultra-violent game Grand Theft Auto IV took in $500 million in sales in its first week. According to The New York Times “The report exceeded the sales expectations of analysts.” It would mean that the company pushed out six million copies.” As it turned out, estimates were right on the ball.

The market will say that the numbers will make it harder for larger video-game publisher Electronic Arts (NASDAQ: ERTS) to take over Take-Two. The offer sits at $25.74. The stock trades about $1 less than that.

The problem with Wall Street’s view of the offer from EA is that it is not unlike Microsoft (NASDAQ: MSFT)’s bid for Yahoo! (NASDAQ: YHOO). The board at the portal may have viewed it as undervalued, but there are no other buyers. The bid went away and Yahoo!’s shares fell. If EA walks, TTWO shares drop.

Take-Two will tell the world that the Grand Theft Auto IV numbers warrant a higher offer from EA. If the larger company has any sense, it will walk away. That would move TTWO shares back to $17 where they traded before the offer. Management at the smaller company will look like a fool.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.

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This entry was posted on Wednesday, May 7th, 2008 at 3:16 pm and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.