So what's the damage?

According to Reuters, Oppenheimer cut its stake in T2 by half, with FMR LLC dropping its 14.75% ownership of the company down to 2.75%. That's approximately 8.8 million and 2 million shares, respectively, with neither firm giving reason for the sale.

Wedbush Morgan analyst Michael Pachter is quoted as saying that a speculated shareholder holdout for better buyout terms may be out of the question, now that two of the bigger owners of Take-Two are bailing out.

Take-Two is planning to announce its quarterly earning on Tuesday, so we'll see what developments occur soon enough.

Take-Two shareholders slash stakes [Yahoo/Reuters]

SEC chooses not to recommend action against THQ [Gameindustry.biz]

Take-Two Interactive on Yahoo Finance [Yahoo]

Take-Two said it received a "Wells" call last Thursday from the staff of the SEC's enforcement division. The staff plans to ask the Commission to file charges related to its investigation into the company's stock options practices and seek a civil monetary penalty.

Take-Two said it is cooperating with the SEC and expects to resolve the investigation through a settlement rather than litigation.

We'll see what the SEC has to say about that.

Take-Two Gets 'Wells' Notice From SEC [Forbes]

But it turns out that Bach had already unloaded an additional $3 million in Microsoft stock on May 1st. (A late SEC filing caused many to overlook this number before.) So that brings the total to $9.2 million shady stock practices by Robbie Bach. Ironically, the stock didn't plummet and all is good in the world. Other than, you know, Bach being front page news on MarketWatch.

Microsoft's Bach sold more stock before Xbox news [via maxconsole]

The broker started coverage of the video-game sector with a neutral rating. In a report, analyst Eric Handler noted that the market is growing, with new gamers attracted by "interesting hardware choices" that are driving "greater creativity" among video-game publishers.

However, he added that slower sales of new consoles than expected and " overextended" company valuations will limit upside in the group for the near term.

Financial stuff makes my head spin; I guess it's a good thing I'm going into a field where I'll be broke for the rest of my life, thus not having to worry about it.

Video-game Stocks Have Limited Upside For Now, Lehman Say [CNN Money]

The center will provide an exchange platform for assets and equity, and offer fund-raising, intermediary and pricing services for companies, said Cai Minyong, president of Shanghai United Assets and Equity Exchange (SUAEE).

More than 30 items ... were listed on the exchange with a combined price of about US$4 million.

Of course, the idea of intellectual property being traded in a country notorious for not really caring about IP rights in any sense of the word is a little ironic. Still, China is desperately trying to give its homegrown game and animation industries a boost in an attempt to compete with countries like Korea, Japan, Taiwan, et al. We'll see how it pans out.
Trading starts on animation, cartoon and game industry exchange [ChinaDaily via Xinhua]

One of the things we never expected to see from Infinium Labs is shady business practices.

Ha ha ha! No, just kidding — if the Phantom console was ever released, we pretty much expected to see a 486 processor shoved into an XBox shell and a swaztika logo slapped on top of the giant neon X. So we aren't surprised at all that the SEC is investigating Infinium Labs ex-CEO Timothy Roberts for misleading investors to artificially raise Infinium's stock prices, then immediately selling his own shares at an inflated price before they got wise.

According to Gamespot, Roberts personally sent out thousands of faxes to investors, guaranteeing a January 2005 launch amongst a gaggle of other bald-faced lies. The faxes informed investors that Infinium's stock values could rise as much as 3,000%. Investors greedily swooped up more Infinium stock. Roberts then immediately sold 1.3 million shares of his own shares, netting a cool $422,500.

With the SEC involved, Roberts now equals screwed. Even if the console is never released, no one can say that gamers haven't had thousands of hours worth of fun with the Phantom Console, can they? - Florian Eckhardt

Ex-Infinium CEO Accused of Stock Scandal [Next Generation]

Damn! Should have shorted Take-Two Interactive!

Running out of cash and pissing off even more litigants, Take-Two Interactive Software—the publisher of Grand Theft Auto — is looking for rescue from buyout firms, according to the New York Post (seriously obnoxious registration required; use BugMeNot). An unnamed "source close to the company" says: "For a fund, it is a bet that the cash flows from sales of Grand Theft Auto: San Andreas and Liberty City Tales, and new management could get around the growing liabilities."

The geniuses running the company have managed to burn through $200 million in cash in the past year, leaving just $100 million. This week, an analyst also rated the stock a "sell"—which never, ever happens on Wall Street. Worst of all for the company, a member of the company's board resigned, writing a stinging letter about the incompetence of the current management and (ouch) lack of candor.

Dang, watching this wreck is almost as fun as causing wrecks in GTA.

Take Two Talks [New York Post]

Usually we don't write about the business aspects of the video game business. Bow-ring! But this time of year stories about investment opportunities in the new year can't be avoided. Normally, I wouldn't invest my own money in gaming stocks — most of them are dogs. But I've come across a bunch of stories in recent days that recommend some of the stronger companies in anticipation of the buying spree usually brought on by the introduction of a new generation of consoles.

In particular, I've seen Electronic Arts and Activision get good recommendations. They've been spanked in recent months by the slowdown of software sales, but they write software for almost all platforms (hence, not hitching their fortunes to one machine), have excellent franchises and have the best management teams.

Like I said, I wouldn't invest my own money in gaming stocks. Way too cyclical for my taste.

Video game development is a good investment [Scripps Howard News Service]

Reuters reports that EA will be "well below" estimates for the December quarter. EA Chief Exec Larry Probst told Reuters, "For the December quarter, it is likely the industry will be down double digits on a percentage basis." However, all of this gloom and doom financial talk shouldn't concern anyone too much. I think, if nothing else, people are being careful with their cash and waiting to see what the next generation of consoles is going to offer us. But, if PS3 ships next holiday season (as people expect) - we'll probably see more shortages and overall sales could still be low.

EA Says to Be 'Well Below' Profit Targets [Reuters]