IBM Up Slightly on Navy Cutback Report, Take-Two Interactive Soars on Earnings

NEW YORK (TheStreet) -- IBM (IBM) rose Tuesday despite the reported threat that the U.S. Navy may begin to scale back on the use of IBM servers for some of its weapons systems. Game publisher Take-Two Interactive (TTWO) soared by double-digits following its strong earnings forecast. eBay's (EBAY)  fell after the Consumer Financial Protection Bureau slapped PayPal with a $25 million lawsuit.

IBM climbed 0.24% to end the day at $173.48.

Big Blue managed to slightly rise, despite a Wall Street Journal report that the U.S. Navy is considering foregoing IBM servers in the use of some of its weapons systems. The Navy is eyeing such a move after IBM sold its server unit to China-based Lenovo Group, according to the report.

According to the report, the federal government has placed restrictions on the military's purchase of Lenovo (LNVGY) BladeCenter servers, because of security concerns now that the IBM server unit is owned by a Chinese company. Lenovo purchased IBM's x86 server business last year for $2.1 billion, according to the Journal


Take-Two Interactive spiked 18.3% to close at $28.62.

The game publisher, widely know for its Grand Theft Auto games, issued a strong fourth-quarter report after the markets closed Monday and issued a forecast better than Wall Street's expectations.

Take-Two reported adjusted fourth-quarter earnings of 49 cents a share on revenue of $427.7 million, beating analysts' expectations of 27 cents a share. The company's revenue, however, missed Wall Street's expectations of $458.94 million.

But its forecast for the current quarter drove the stock higher, after the company said it expects to earn between 25 cents to 35 cents per share. Wall Street had been expecting a net loss of 2 cents a share.

Take-Two's PC version of its Grand Theft Auto V in the fourth quarter, as well as its online version of the game, helped to drive its strong performance in the fourth quarter, according to a Stifel research note cited in an Associated Press report.


eBay fell 0.40% to $59.25 after its PayPal unit got slapped with a lawsuit.

The Consumer Financial Protection Bureau filed a $25 million lawsuit in federal court against PayPal, alleging the company signed up consumers to its PayPal Credit service without their permission, according to a Reuters report.

The complaint alleges PayPal directed customers towards its PayPal Credit service, rather than the customer's preferred form of payment, according to Reuters. The lawsuit also alleged PayPal engaged in deceptive advertising, as well as incorrectly handled billing problems.

PayPal, meanwhile, neither admitted nor denied the bureau's allegations, according to the bureau's consent order cited in the Reuters report.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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