Strauss Zelnick Gets Off Scot-Free

Rafael Cohen notes: With all the apocalyptic rumblings on Wall Street this week, you might have missed the result of the game of chicken Take-Two's Strauss Zelnick has been playing with Electronic Arts for the last nine months.

He lost.

On Monday, EA ended its attempt to buy Grand Theft Auto maker Take-Two, sending its stock tumbling 24 percent. That's almost Morgan Stanley-esque which fell 31 percent in the same period.

Zelnick maintained throughout EA's takeover bid that they were undervaluing his company and stood his ground, refusing EA's $26 per share bid and resisting the takeover when it became hostile. Shares are now trading at $15.51.

It seems like Zelnick will have plenty of explaining to do to Take-Two's shareholders about why their stock value is tanking when an offer has been on the table for almost a year.

EA said they gave up because they could no longer have marketed Take Two's games for the holiday season.

Zelnick maintains there are other suitors. Activision is rumored to be interested, especially in light of CEO Bobby Kotick's stated admiration of Sam and Dan Houser, the brothers behind the GTA series.

But what kind of price can Zelnick get now? If no sale happens, many think EA will just come back around after Christmas and pick the company up at a much lower price.

Of course, this could all be a case of Zelnick getting bad advice. When EA first made its $26 per share bid back in March, Take-Two retained two financial advisors to review the offer: Lehman Brothers and Bear Stearns.