Updated from 4:02 p.m. ESTOnce again, mounting evidence of an accounting scandal, this time at Take-Two Interactive ( TTWO), isn't fazing the analyst community. Take-Two Interactive's CFO Albert Pastino resigned Wednesday for "personal reasons" after the firm restated seven quarters of financial statements and said the Securities and Exchange Commission is probing its bookkeeping. But for a company that has almost never in its brief history as a publicly traded firm stuck by one of its original earnings statements, analysts continue to show wide-eyed faith that Take-Two will turn things around. "While I don't like what happened, you have to look at it on a fundamental basis, you have to believe what they say" about the future, noted Richard Zimmerman, an analyst at Commerce Capital Markets, who has a strong buy rating on the stock.
At PastureSince Take-Two first warned in December it would restate results, only Jefferies has downgraded the stock. A string of other brokerages including Credit Suisse First Boston, Gerard Klauer Mattison and Wedbush Morgan have all reiterated their buy ratings. U.S. Bancorp Piper Jaffray actually raised its rating to strong buy the day after the announcement. None downgraded the stock on Wednesday. Take-Two has been halted for trade at $18.56 since January. Analysts' confidence might seem unwarranted, but it isn't unprecedented. Nary a discouraging word was spoken about Enron by Wall Street's research community for the duration of its descent into bankruptcy. And analysts have been similarly
|Road Kill |
|Take-Two hopes sales of its Grand Theft Auto 3 can help put memories of profit restatements in the rearview.|