Profit on Grand Theft Auto IV with Gamestop
Take-Two Interactive (Nasdaq: TTWO) announced record sales of Grand Theft Auto IV. Approximately six million units of the video game have sold globally since the Apr 29 launch. The estimated retail value of these sales is $500 million. Nearly 3.6 million units sold in the first day.
Shares of TTWO have been trading in a range as investors await the outcome of a takeover proposal by Electronic Arts (Nasdaq: ERTS). The fiscal 2008 consensus earnings estimate for TTWO had declined by two cents over the past 30 days, though it would seem the strong launch of Grand Theft Auto IV should cause brokerage analysts to revisit their forecasts.
A more broad way to take advantage of the video game space would be to buy shares of Gamestop (NYSE: GME), who profits regardless of which video game or system does well. GME likely accounted for a sizeable percentage of Grand Theft Auto IV sales and should benefit from the U.S. launch of Nintendo’s Wii Fit later this month.