Take-Two Interactive Software, Inc (TTWO) has confirmed it is buying back stock worth a total of $203.5 million from investor Carl Icahn. The company, famous for having published critically acclaimed games such as Bioshock Infinite and Grand Theft Auto V, will be severing ties with Icahn after the buyback of 12.02 million shares at yesterday’s closing price of $16.93.
The company was not too eager to disclose details regarding their share repurchase program, but it is possible that there were conflicts between the company’s and Icahn’s future opinion of the company’s position. Icahn’s primary objective may have been to capitalize on maximizing short-term shareholder value, while the company’s main objective is to focus on maximizing their growth for the long term. Nonetheless, Take-Two’s CEO Strauss Zelnick mentioned that the transaction occurring between Icahn and the company displayed the level of confidence that Icahn had for the company.
Four years ago, Icahn’s decision to invest in the Take-Two landed him an 11% stake in the video-game company. He had planned to acquire the company before someone else made the move. However, due to the overwhelming sales of Grand Theft Auto V, Icahn was denied the opportunity to become the owner of the company. While the activist investor was not able to achieve exactly what he had in mind, the stock investment allowed him to make a handsome gain of about $85 million. After the buyback, Take-Two Interactive experienced a hit of about 5.4% in its stock price.
Icahn is known for acquiring large stakes in companies with the intent of changing their corporate strategies. His quest for ownership of Take-Two started in 2006, when he disclosed that he held a 1.1% stake in the company. During the 2009 period, Icahn acquired 9.15 million shares at an average price of $8. When the stock price reached $12, his stake increased from 11.69% to 12.9% in 12 months. Grand Theft Auto V’s heightened success caused Two-Take’s share prices to reach an all-time high value of $19.25 in August.
In October, he sold a percentage of his stake in Netflix Inc. (NFLX), resulting in a spread of $800 million in a span of 12 months. Icahn sold a little more than 19 million shares which he acquired from Lions Gate Entertainment (LGF) two years ago for $7 per share, after his plan to acquire the company backfired. In 2005, he became the largest shareholder of Blockbuster Entertainment, when the stock was worth $10. He left the company in 2010, selling most of his stake. Shortly after, Blockbuster became bankrupt in September 2010 due to overwhelming competition from Netflix, Redbox and video on demand services, and was taken over by Dish Network Corporation (DISH).