Take-Two Execs Put Themselves Before Shareholders

MarketWatch senior columnist Herb Greenberg simplified a recent regulatory filing and suggests that Take-Two management is cashing in on the EA bid at the expense of shareholders.

In sum, Greenberg uncovers that the day before Take-Two rejected EA's first offer in early February, Take-Two management, led by ZelnickMedia execs, amended its agreement with the company by inflating their pay and bonus -- while withholding the information of EA's first offer from shareholders.

Here's Greenberg's take on the situation:

"That's right: Take-Two received a rich and serious offer from a substantial company. It didn't disclose the offer, and hoped to keep it secret until at least after the annual meeting, when investors might have challenged the compensation package and attempts by the company to block the deal. Then, in a public filing, Take-Two in effect threatened EA not to make the offer public by giving ZelnickMedia a chance to enrich itself, at the expense of shareholders, by granting restricted stock that will vest immediately if EA made the deal public."

Read the full article for Greenberg's analysis.


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ktchong3889d ago (Edited 3889d ago )

That's why EA took the issue to the public, because Take-Two executives were withholding the information from its shareholders -- while secretly using the information to change the company pay and bonus structure to take advantage of the impending takeover.

barom3888d ago

This is actually a good thing dude. Do you know what shareholders goal is? And their only goal when buying stocks? Money. They know nothing about games.

Only good thing they can do is provide the budget. But leave the decisions to the company.

ScentlessApprentice73888d ago (Edited 3888d ago )

From a business and accounting standpoint this was not an ethical decision on Take-Two's part because businesses are required to disclose any and all material events that could affect shareholder's or potential investors decisions; this is referred to as the Full Disclosure Principle.

Not abiding by these organizational accounting rules could result in an audit. Take-Two better hope they don't suffer any backlash from this.

Edit: and by "provide the budget" I assume you mean provide financing and capital investments in the company.

Joey Gladstone3889d ago (Edited 3889d ago )

Almost ENRON'esque in a certain way, but we have to remember no matter how friendly some businessmen may appear for TV and event Endorsements, they are all essentially sharks because you have to be if you are going to make it in that type of Business World where the all mighty Dollar truly does rule all.......
."The JOEY has Spoken"

JohnRico3888d ago

This take over is going to happen folks enjoy Grand Theft Auto 4

Bladestar3888d ago

lol... so much for EA being bad.. ehh? all about the money... don't think for a second that Take-Two don't want to be purchased... but... why don't Sony buy Take-Two since they would be the biggest losers from this deal? (all games will go multiplatform or some may even go exclusive to microsoft platforms if microsoft pay)? mmm.. wait.. I know.. Sony is too busy paying and spending money pushing blu-ray...

MattFoley3888d ago (Edited 3888d ago )

EA is going to scoop up whatever companies they can that own the rights to big games. We have been seeing this all year. I predict that sometime next year Microsoft buys out EA. Think about it. It makes total sense. Buying out EA for an insane amount of money(think yahoo) no EA sports games for PS3 alone would bring Microsoft tons of money in software and hardware sales. Microsoft knows the money is not in hardware but software. If this really happened they would have Sony by the balls. Sony would still have exclusives but think about all the multi's they would loose.

Taketwo will be bought out by EA, the company has been on the brink for sometime. Great games or not.

Another reason this makes sense is that they are really dragging their feet in developing for PS3 because they know in a year or so they won't have to develop for them at all. Peter Moore just went over there to make it easier for Msoft to take them over, getting the company ready for the inevitable take over.

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