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Sept. 17, 2021, 8:53 a.m. EDT

Take-Two stock downgraded amid concerns about 'Grand Theft Auto' delay

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By Emily Bary

Shares of Take-Two Interactive Software Inc. /zigman2/quotes/204008930/composite TTWO +2.73% are off 1.1% in premarket trading Friday after BMO Capital Markets analyst Gerrick Johnson downgraded the stock to market perform from outperform. Johnson is concerned about Take-Two's plans to delay the release of its new "Grand Theft Auto" version by four months, which will push it out of the holiday window. "We believe it is very prudent to delay a game if it is not to the highest possible standard," Johnson wrote, noting that gaming companies can ruin potential "long-term" successes by rushing games out prematurely. "However, delays no longer seem to be an isolated event at TTWO and are happening with more frequency," he continued, citing a delay for "Red Dead Redemption 2" a few years back and for "Kerbal Space Program 2" more recently. "In the current environment, we think investor concerns around delays are heightened owing to the fact that video game consumption is high now, boosted by the COVID-19 pandemic, and there is plenty of skepticism that engagement might not be as strong as we emerge from COVID restrictions at some point in the future," Johnson wrote. He also said that Take-Two's multiple could "continue to come under pressure, mostly owing to exogenous events such as new Chinese gaming regulations and closer scrutiny of video game companies including content in 'Grand Theft Auto' releases owing to heightened ESG focus amongst institutional investors." Take-Two shares have lost 11% over the past three months as the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.84% has gained 6%.

US : U.S.: Nasdaq
$ 165.78
+4.40 +2.73%
Volume: 1.34M
Dec. 3, 2021 4:00p
P/E Ratio
Dividend Yield
Market Cap
$19.11 billion
Rev. per Employee
-38.67 -0.84%
Volume: 2.71B
Dec. 3, 2021 5:35p

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