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Take-Two CEO responds to 18% stock crash: 'It's a bit severe,' outlook hopeful

Take-Two Interactive CEO Strauss Zelnick responds to $TTWO's 18% stock drop: 'It's a bit severe, but not challenging from a company point of view'

Take-Two CEO responds to 18% stock crash: 'It's a bit severe,' outlook hopeful
Published Nov 8, 2022 5:02 PM CST   |   Updated Sat, Dec 3 2022 6:03 AM CST
1 minute & 37 seconds read time

Take-Two Interactive stock is down 18% after yesterday's earnings call, but company CEO Strauss Zelnick is still optimistic about the company's trajectory.

Take-Two CEO responds to 18% stock crash: 'It's a bit severe,' outlook hopeful 18

Yesterday Take-Two Interactive upset investors with downward revisions for its Fiscal Year 2023 earnings forecast that shaved off roughly $320 million on both the low and high-end; Take-Two previously forecasted $5.73 - $5.83 billion in net bookings for FY23, and the new revision is at $5.41 - $5.510 billion. This downgrade coupled with lower-than-expected monetization revenues and key statements that in-game purchases are "under pressure" led to a significant drop in stock price.

At the time of writing, Take-Two stock is trading at $93.57 USD, down 18.68% in the past 5 days. Now company CEO Strauss Zelnick gives a response on the share drop:

"I am a bit surprised, it seems severe. But in fairness there's an awful lot of securities under pressure right now, particularly in the entertainment space. I never argue with the market, as you know. It's hard to believe in the market in any given day. Over time, of course the market ends up being right. We will trade on our fundamentals over time," Zelnick said in a recent CNBC interview.

"This is a challenging moment for a stock price point of view, but it's not a challenging moment from a company point of view. We're still looking at really solid results, $5.4 to $5.5 billion dollars of net bookings, over $650 million in operating cash flow expected for the year."

"This is a really solid company that's positioned exceedingly well as the number 2 or number 3 pure-play interactive entertainment company--depending on what happens with Microsoft and Activision," Zelnick said.

Take-Two CEO responds to 18% stock crash: 'It's a bit severe,' outlook hopeful 22023

When it comes to company outlook, Take-Two expects to ship a whopping 87 video games across all platforms and genres by the end of Fiscal Year 2025 (March 2025). Many of these new projects will be what Take-Two calls "immersive core" games, which includes heavy-hitting megaton franchises like Grand Theft Auto.

Following its combination with Zynga, Take-Two now makes nearly 50% of its ret bookings from mobile. The company has become a powerhouse in the dedicated gaming and mobile space following this merger but now there's lots of pressure for perpetual growth.

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NEWS SOURCE:cnbc.com

Derek joined the TweakTown team in 2015 and has since reviewed and played 1000s of hours of new games. Derek is absorbed with the intersection of technology and gaming, and is always looking forward to new advancements. With over six years in games journalism under his belt, Derek aims to further engage the gaming sector while taking a peek under the tech that powers it. He hopes to one day explore the stars in No Man's Sky with the magic of VR.

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