What’s Happening With Take-Two Interactive Stock?
The price of Take-Two Interactive stock (NASDAQ: TTWO) has seen a fall of over 9% in a month, while it’s down 23% YTD. The company announced its plans to acquire the mobile gaming company – Zynga – in a deal valued at $12.7 billion in January this year. TTWO stock was weighed down, given that the deal reflected a 64% premium to the then market price of ZNGA stock. Take-Two Interactive recently raised $2.7 billion in debt capital to fund the Zynga acquisition. The company had a debt of a little over $200 million last quarter, while its cash in hand was nearly $2.5 billion. The debt levels will rise meaningfully post the Zynga acquisition.
Furthermore, there are some near-term headwinds, including a decline in gaming user engagement levels after the global economies have opened up and people are venturing out of their homes post-pandemic. Zynga itself has been facing pressure due to changes in Apple’s ad tracking policies. That said, we see the Zynga acquisition as a positive for Take-Two Interactive, given its superior gross margins and fast-growing mobile-gaming business.
Now that TTWO has seen a fall of 9% in a month, will it continue its downward trajectory, or is a rise imminent? Going by historical performance, there is a higher chance of a rise in TTWO stock over the next month. Of 250 instances in the last ten years that TTWO stock saw a twenty-one-day fall of 9% or more, 135 resulted in TTWO stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 135 out of 250, or about a 54% chance of a rise in TTWO stock over the coming month. See our analysis on Take-Two Interactive Stock Chance of Rise for more details.
Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using last ten years’ data
- After moving -0.7% or more over five days, the stock rose on 60% of the occasions in the next five days.
- After moving -9.6% or more over ten days, the stock rose on 61% of the occasions in the next ten days.
- After moving -9.2% or more over a twenty-one-day period, the stock rose on 54% of the occasions in the next twenty-one days.
This pattern suggests a higher chance of a rise in TTWO stock over the next five days, the next ten days, and the next month.
Take-Two Interactive (TTWO) Stock Return (Recent) Comparison With Peers
- Five-Day Return: FDS highest at 4.2%; DOX lowest at -8.6%
- Ten-Day Return: FDS highest at 0.6%; TTWO lowest at -9.6%
- Twenty-One Day Return: FDS highest at 1.3%; TTWO lowest at -9.2%
While TTWO stock may see higher levels, the Covid-19 crisis has created many pricing discontinuities, which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Ashland vs. Microsoft.
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| Returns | Apr 2022 MTD [1] |
2022 YTD [1] |
2017-22 Total [2] |
| TTWO Return | -11% | -23% | 179% |
| S&P 500 Return | -2% | -6% | 99% |
| Trefis Multi-Strategy Portfolio | -2% | -9% | 257% |
[1] Month-to-date and year-to-date as of 4/21/2022
[2] Cumulative total returns since the end of 2016