SEC Launches Take-Two Investigation 73
crecente writes "Take-Two, already the subject of a Grand Jury inquiry, is now being 'informally investigated' by the Securities and Exchange Commission. This latest investigation looks at stock option grants made by the company from Jan. 1997 to the present. Just how many investigations can a publically traded company handle before their stock turns to worthless paste?"
Re:hmm... (Score:2)
Re:hmm... (Score:1)
Informal, eh? (Score:5, Funny)
Re:Hey, gamers! (Score:2, Funny)
Re:Informal, eh? (Score:1)
Does anyone have more info? (Score:5, Funny)
Re:Does anyone have more info? (Score:3, Interesting)
Hold on to your doodle pads... take-two will be ok and they might be worth a lil more in the future
Re:Does anyone have more info? (Score:3, Interesting)
This is the battle that Overstock is going through right now. And Krispy Kreme and Vonage and Delta Airlines.
You can read more about this at http://www.thesanitycheck.com/ [thesanitycheck.com], http://www.faulkingtruth.com/ [faulkingtruth.com] an
Re:Does anyone have more info? (Score:3, Informative)
The reason is a study [uiowa.edu] published by Eirk Lie. The short story is he found that executives in many companies "happened" to receive stock options dated to the most recent low in the stock price. This "happened" at a much higher rate than dictated by chance alone. IOW it looked like many companies were backdating the date the options were granted to
Re:Does anyone have more info? (Score:3, Informative)
Wow, that's a loaded statement -- do you have a specific dislike for executives?
From your comment, it appears that you don't understand much about how stock options work. Check out this Wikipedia article [wikipedia.org]. It explains a little bit about how strike price (or excercise price) works. In fact, most companies issue stock options at a strike price; these are not
Re:Does anyone have more info? (Score:3, Informative)
No, right or wrong that's just where most of the press seems to be focused. You're right that its an issue with anyone who receives stock options, or more specifically with any company that uses them for compensation.
More often than not, this is not illegal or shady.
As the article I linked stated, there is nothing wrong with it, as long as certain procedures are followed. Most notabley, everyone involved needs to be informed up-
Re:I don't know. . . (Score:1, Flamebait)
Umm, Editor? (Score:1)
This needed cleaning up before posting
One in a long line... (Score:4, Informative)
Re:One in a long line... (Score:3, Interesting)
Re:Average Joe's Survival (Score:1)
ttwo (Score:1)
Re:ttwo (Score:1)
Re:ttwo (Score:3, Funny)
"informal"? (Score:4, Insightful)
Re:"informal"? (Score:3, Funny)
Since roughly about .025 seconds after the ink dried on the legislation creating the SEC.
No Big Deal (Score:5, Insightful)
Re:No Big Deal (Score:2)
Re:No Big Deal (Score:2)
I just had this mental image of the frontier town becoming "civilized" and having the new terrors of bankers, lawyers, and "the government" to fear instead of just frontier life. I'd guess that 70%-80% of all businesses started end in failure reguardless of time period. I'm going to say that it takes a good 5 years of both profit
Re:No Big Deal (Score:1, Informative)
How many? (Score:1, Funny)
Owl: Lets find out.
One, *lick*
Two, *lick*
Three, *CRUNCH*.
Three.
Thoughtful investing? (Score:2, Interesting)
So does that mean that immediately upon hearing of investigatory action the investor in said company should dump all stock? Say they choose that route. Then the investigation reveals that the company was indeed breaking the law. Then it was a wise choice to dump
Re:Thoughtful investing? (Score:4, Informative)
It all goes back to the golden rule of investing, which is you buy stock based on the company, not based on the stock.
If a company was hiding serious financial problems, serious investors would have known about it long ago and dumped the stock. It's really difficult to hide financial problems that are so bad that they actually adversely affect the long-term viability of a company. Companies can and do put spin on their financial results all the time, but to actually mis-state what would have to amount to billions of dollars worth of results would be pretty unthinkable. (It's happened in some high-profile cases, but it's hardly the norm.)
In fact, TTWO *did* mis-state quite a bit of revenue a few years back, and they got caught and had to re-state. And it was a decent chunk of change, but it wasn't enough to affect the company going forward, so they took a bit of a hit and went on. Their stock was at 7 at that time but ultimately hit something like 31. If you were an investor who actually *bought* on the day they admitted wrongdoing, you would have come out nicely ahead.
The reason being, of course, that fundamentally the company was still putting out good products that people were interested in buying. If, on the other hand, you knew that TTWO's games weren't selling - if Vice City had only sold 1 million copies, for example, and San Andreas only 500,000 - but they *still* were claiming record profits, then you would start to ask questions. But the bottom line is it's not the result of any *investigation* that should cause a stock to go up or down, it's what that investigation reveals about the company itself. You need to look beyond the superficialities.
If the norm is that after a positive result, i.e. no law-breaking was found, the stock does not go up, then the only logical answer is to dump the stock no matter what when the investigation is announced.
In other words, buy high, sell low, huh? That's not really a winning strategy.
Good investors would have bought TTWO's stock after the negative results of the previous investigation, when everybody else was selling. Those people made out like bandits later on.
A smart strategy, if you're a stock holder that still truly believes in a company after all these investigations, is to simply buy more stock when it drops. This way, you average your costs - if you bought your first stock at 12, and it drops to 8, you can buy enough that your average cost was 10. You'll make more money later, provided the company itself continues to do well.
So in this respect whoever hears about the investigation first gets to lose the least amount of money. Which is to say, probably the company owners and employees. Is that insider trading?
Yes, and it's illegal. And since everybody has to report their buys and sells, it's not really possible to get away with it under obvious conditions like this.
And what of the possbility of a more secretive investigation? Because in this case it certainly seems like the company in question is essentially guilty until proven innocent, and possibly punished before any proof is found. This certainly seems to breach the idea of constitutional rights.
What constitutional rights would those be? So the government is not allowed to investigate anybody because some stupid idiot shareholders decide to sell the first wind of it they get?
Is there really any way to make this less damaging to the companies?
Again, in what way is it damaging? Is this investigation into TTWO in any way affe
Re:Thoughtful investing? (Score:1)
I've got no karma points, so thank you for providing such a thorough answer.
Re:Thoughtful investing? (Score:1)
TLF
The EFF May Want to Get Involved (Score:1, Offtopic)
Has nothing to do with the grandjury investigation (Score:2)
Re:The EFF May Want to Get Involved (Score:2)
And what ever you do, you don't have an employee leak the code to get it back into the game. There's numerous games when certain stuff was taken out because of ESRB issues. The company I worked at has done it a couple times, not because they felt it was wrong, but because of a ESRB is
Re:The EFF May Want to Get Involved (Score:2)
Re:The EFF May Want to Get Involved (Score:1)
This is a maliciously motivated attempt by the SEC to prosecute a company based on a rabid assault from the Religeous Right. This theocractic government, not content with ESRB guidelines and FCC fines is going beyond the pale by trying to collapse the stock price even further. I think the
Re:The EFF May Want to Get Involved (Score:2)
Which of course raises the question -
Re:The EFF May Want to Get Involved (Score:2)
Which of course raises the question - if the code was not intended to be in the game (Take-Two had to know it exceeded their target rating), what was it doing commited to the main branch in the first place?
Easter egg? Rogue developer? Shit happens.
If there truly were no connections to it - it could have safely been removed *without* retesting.
And if you could know something like that, you wouldn't need testing, now would you?
The facts of the matter don't support any other conclusions than Take-T
Re:The EFF May Want to Get Involved (Score:2)
Did you maybe mean to post your comment to a different story about Take-Two? I don't see anything in the story suggesting that the SEC investigation is in any way related to the presence of the "Hot Coffee" code on the media GTA was shipped on.
To address your semi-OT point, I understand why Take Two didn't excise the code completely, but I also think they could have saved themselves a lot of trouble when they submitted the game to the ESRB for review. If they had said "early revisions of this game include
It's actually a big problem apparantly (Score:2)
You can see it in other games though. In Civ 4 there's mods that enable so called "lost wonders" they have videos and everything. Basically, Firaxis decided to produce
Re:The EFF May Want to Get Involved (Score:2)
Investors had a right to know about HotCoffee. (Score:2)
You are seriously mistaken, the rules are very different when you are putting your investor's money at risk. A company is legally required to inform investors of risks. Leaving content in a game that may result in product recalls, remastering and replacements, lawsuits, etc may be the sort of thing that investors have a right to know about. Having the SEC loo
how many? (Score:4, Funny)
One... two... *CRASH* three
It's three
Re:how many? (Score:1)
Re:how many? (Score:3, Insightful)
How many... (Score:2)
Um, 42?
Re:How many... (Score:1)
Re:How many... (Score:2)
Re:How many... (Score:1)
Grand Jury * (Score:2, Interesting)
I am pretty sure they could indict a wet paper bag if they felt the need.
If Only... (Score:2, Interesting)
# of investigations != importance (Score:2)
Gee, I dunno, let's ask Microsoft or IBM.
If a company is financially strong, they'll shrug off investigations *even if* the allegations are found to be true. It's only when companies are already tottering, that investigations can make investors lose confidence.
Just Desserts (Score:1)
For releasing Battlecruise 3000 AD upon the world - they are reaping what they have sown.
Re:Just Desserts (Score:1)
Grand Jury Inquiry (Score:4, Funny)
And now, another annoying idiot (Score:1)
Ouch (Score:2)
Motives? (Score:1)