improved financials, but Wedbush Morgan analyst Michael Pachter is tapping the brakes if the company thinks Grand Theft Auto IV is going to drive profits and be a "panacea" for all its ills. Giving GameDaily some fancy financial math, Pachter lays out that Take-Two management is operating in a fantasy world if they think their profit forecasts are credible. Pachter goes on to say that Take-Two still receives a "Sell" rating and questions if management is even capable of turning the company around.
He then plunges the dagger deep into Take-Two management not only over fiscal issues, but basic management. He believes they are sincerely trying to turn the company around, which continues to operate at a loss, but that they have "not managed a business like this one in an environment like this." He doesn't understand why there weren't staff reductions after the "abysmal performance" of All-Pro Football -- especially with EA having the NFL in its pocket. Pachter believes investor confidence in Take-Two is unfounded and reminds the company had a cumulative operating loss of $450 million between Feb. '05 and Jan. '08. He concludes that investors and management have "overconfidence in the performance of GTA IV."