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Take-Two shares jump on Icahn stake

Billionaire investor acquires 11% of the GTA publisher; stock jumps almost 10%

Despite posting losses of USD 138 million last week, shares in Take-Two Interactive rose by almost 10 per cent on Friday following a significant investment by Carl Icahn.

The billionaire investor prompted speculation that he intends to take more of a front seat in the company management with his 11 per cent stake, as stock went up from USD 8.25 to close at USD 9.01 - with a further 1.4 per cent increase in after hours trading.

"We believe that Mr Icahn intends to force the company to consider a sale, and note that he has a history with [Take-Two chairman] Mr Zelnick," wrote Wedbush Morgan's Michael Pachter in an investment note. "When Mr Icahn became Blockbuster's biggest shareholder in 2004, he sought three board seats at that company, and nominated himself and Mr Zelnick for two of them.

"Both remain on the Blockbuster board, and we are confident that they know each other well. We think that Mr Icahn's significant stake in Take-Two will allow him access to Mr Zelnick, and we expect to see increased interest in the stock as management responds to Mr Icahn's suggestions about how to unlock value."

But Pachter went on to note that the company's "slow pace of development" remained a problem, and cast doubt on whether Icahn's suggestions would "change the company's operations radically".

The publisher is gearing up for a busy Q1, with key releases including BioShock 2, Mafia II, Max Payne 3 and Red Dead Redemption.

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