Take-Two Interactive Share Forecast January 2022 – Time to Buy TTWO?
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Shares of American video game holding company Take-Two Interactive (NASDAQ: TTWO) are in the green today, after closing at $148.42 as of January 11th (19:59 EST). Various reports indicated that Take-Two Interactive is planning to acquire Zynga in a $12.7 billion deal. Investors were less thrilled with the deal, which negatively impacted the share price last month.
Take-Two Interactive – Technical Analysis
Take-Two Interactive’s financial statement indicates a market cap of $17.13 billion with total assets worth $6.619 billion. Revenue for 2020 was at $3.37 billion with a profit margin of 17.46% compared to $3.09 billion in 2019.
Moving averages such as Exponential Moving Average (10)(164.15), Simple Moving Average (10)(169.18), Exponential Moving Average (20)(168.75), Simple Moving Average (20)(172.57) and Exponential Moving Average (30)(170.16) are indicating a sell action.
Oscillators such as Williams Percent Range (14)(−76.78), Bull Bear Power(−42.01) and Ultimate Oscillator (7, 14, 28)(42.02) are neutral.
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Recent Developments
Take-Two Interactive is the maker of several successful video game titles such as Grand Theft Auto, NBA 2K, and Red Dead Redemption. In June last year, the company completed a $378 million deal to acquire Top Eleven developer Nordeus, further expanding its mobile game division, which, as of July 2021, is known as T2 Mobile Games.
The company signed a deal to extend Take-Two’s rights to develop the NBA 2K games. In 2020 Take-Two established a new, yet-named studio under Private Division later named Intercept Games, located in Seattle to take on the development of Kerbal Space Program 2.
Buyout Codemasters
In November 2020, the company was close to buyout Codemasters, but was eventually beaten by Electronic Arts.
It formally withdrew its offer in January 2021, however, the company received an $826 million investment from The Public Investment Fund of Saudi Arabia, which acquired 3.9 million shares of Take-Two in February 2021.
As reported in the quarterly earnings report released back in November, Take-Two Interactive’s net bookings exceeded management’s expectations and increased 3% year over year to $985 million. However, the most notable piece of information was that Take-Two had repurchased $200 million worth of its own stock in the quarter. As the company doesn’t conduct a share repurchase program on an ongoing basis, this news caught investor attention.
As mentioned before, Take-Two Interactive started the year with rumours that it will acquire Zynga. The market reacted negatively to the news at first, as analysts think that the company is overpaying for the acquisition. However, the combined company has the potential to become a leader in the mobile gaming world.
The transaction will be complete during the first quarter of Take-Two’s fiscal year 2023, ending Jun. 30, 2022. To fund the cash component of the deal, Take-Two Interactive has received committed financing of $2.7 billion. This came from a combination of cash from its balance sheet and proceeds of new debt issuance.
Should You Buy TTWO Shares?
The deal to acquire Zynga will put Take-Two in a better position to utilize its franchise portfolio. Thus, it will also allow the company to enter the lucrative mobile gaming market. Zynga is a proven company that can launch and sustain hit properties through downloadable content updates. The merger will bring in new gaming franchises and proven development and marketing talent.
It will also create roughly $100 million in cost-saving synergies across the first two years. More than $500 million in additional net bookings opportunities are available for Take-Two. This is a worthwhile buying opportunity for TTWO shares.
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