market folly

Due to a transaction on January 21st, activist investor and renowned rabblerouser Carl Icahn has filed a Form 4 with the SEC disclosing that he has acquired 783,479 shares of Take Two Interactive Software (TTWO) at a price of $5.25 per share via his investment vehicles (hedge funds, etc). We need to be clear that Icahn did not purchase additional shares. He simply exercised the calls that he already owned. We mentioned these call options when we posted about Icahn ramping up his TTWO stake back in December. Icahn still owns 9,158,479 shares of TTWO (the same aggregate exposure he reported back in mid-December). Taken directly from the SEC filing,

"On January 21, 2010, (Icahn) exercised American-style call options referencing an aggregate of 783,479 underlying shares. As a result of exercising the Call Options, (Icahn) acquired 783,479 shares, which are included in the 9,158,479 shares reported in this Form 4."

So, Icahn exercised options on TTWO that originally had an expiration date of December 16th, 2011. Keep in mind that Icahn also previously filed a 13D with the SEC, a form that signifies his activist intentions with his stake (a trademark of Icahn's rabblerousing ways). He feels shares are undervalued and might seek to talk with management. Many analysts believe that Icahn's entrance into such a name means that TTWO will most likely become an acquisition target again as it had previously been subject to advances from fellow gaming firms like Electronic Arts (ERTS).

Carl Icahn runs hedge fund Icahn Partners and focuses on activist investing where he seeks to implement change at various companies. We've covered his movements in-depth here on the blog and back in October he laid out the idea to short real estate. In the past, we've also detailed some of his portfolio activity. For more investing insight from Carl Icahn, check out his guest lecture at Yale.

Taken from Google Finance, Take Two Interactive is "a global publisher, developer and distributor of interactive entertainment software, hardware and accessories. The Company operates in two segments: publishing and distribution. The publishing segment consists of Rockstar Games, 2K Games, 2K Sports and 2K Play publishing labels. The Company develops, markets and publishes software titles for gaming and entertainment hardware platforms, including Sony’s PLAYSTATION3 (PS3) and PlayStation2 (PS2) computer entertainment systems; Sony’s PSP (PlayStationPortable) (PSP) system; Microsoft’s Xbox 360 (Xbox 360) video game and entertainment system; Nintendo’s Wii (Wii) and DS (DS) systems, and for the personal computers (PC) and Games for Windows. The Company’s distribution segment, which includes its Jack of All Games subsidiary, distributes its products, as well as software, hardware and accessories produced by others to retail outlets in North America."