Take-Two (NASDAQ:TTWO) Interactive Software Inc. (NASDAQ:TTWO) President Karl Slatoff has sold a significant portion of his company stock, according to a recent filing with the Securities and Exchange Commission. The transactions, which took place on May 31, 2024, involved the sale of 49,402 shares at prices ranging from $158.46 to $159.46, 32,054 shares at prices from $159.47 to $160.47, and 6,105 shares at prices between $160.48 and $160.84. In total, Slatoff disposed of company shares for an aggregate sum exceeding $13.9 million.
The sales were conducted under a prearranged Rule 10b5-1 trading plan, a tool that allows company insiders to sell shares at predetermined times to avoid accusations of insider trading. This trading plan was adopted by ZMC Advisors, L.P., a partnership in which Slatoff is a partner, on December 8, 2023. The sales helped cover tax obligations arising from the vesting of restricted stock units (RSUs) granted under a management agreement.
The SEC filing also noted the forfeiture of 67,920 performance-based RSUs by ZMC due to unmet performance conditions. Additionally, the filing revealed that on the same day, ZMC distributed 84,128 shares to its employees, including 16,545 shares to Mr. Slatoff. These shares were part of the vested RSUs and are not included in the total sale value.
Furthermore, the filing reported the annual grant of 516,179 RSUs to ZMC on June 3, 2024. These grants include time-based and performance-based RSUs, with a detailed vesting schedule disclosed in the company's registration statement.
Investors often monitor insider transactions as they can provide insights into executives' perspectives on the company's current valuation and future prospects. While the sales are significant, it's important to note that they were planned in advance and are part of a broader compensation and tax strategy.
Following the transactions, Slatoff's indirect ownership through ZMC Advisors, L.P. stands at 1,423,088 RSUs. Slatoff has disclaimed beneficial ownership of these securities except to the extent of his pecuniary interest.
Take-Two Interactive Software Inc. remains a major player in the prepackaged software services industry, and insider activity such as this will continue to be a point of interest for shareholders and potential investors.
InvestingPro Insights
In light of the recent insider transactions at Take-Two Interactive Software Inc. (NASDAQ:TTWO), investors may find it beneficial to consider the current financial metrics and market sentiment surrounding the company. According to InvestingPro, Take-Two's market capitalization stands at a robust $28.4 billion, reflecting its significant presence in the gaming industry. However, the company's P/E ratio is currently negative at -7.53, indicating that it has not been profitable over the last twelve months as of Q1 2024. This is further underscored by an adjusted P/E ratio of -27.47, suggesting investors are paying a higher price for each dollar of earnings, or in this case, losses.
Moreover, the company's stock trades at a high Price / Book multiple of 5.02, which may raise concerns about valuation among some investors. Despite these figures, Take-Two has experienced a gross profit margin of 54.75% over the same period, showcasing its ability to maintain a strong profit on its sales. Additionally, the stock is trading near its 52-week high, with the price at 96.72% of this peak, potentially indicating a positive market outlook or, as per an InvestingPro Tip, a sign that the stock is in overbought territory.
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