Take-Two has decided to issue “$100 million in convertible senior notes to raise funds for general corporate purposes”.
What in the name of sainted Jesus does that mean, says you? Wedbush Morgan mega-analyst Michael Pachter sets you straight:
It means that Take-Two has decided to borrow $100 million. The company currently has $180 million, but has $70 million in debt under a revolving line of credit. It’s possible that they want to pay off the line of credit and shift the debt to something more predictable (sort of like paying off a credit card with a home equity line).
It’s also possible that they have plans to spend a bit more money, either on acquisitions or on operating their business. The debt is a five year bond, but Take-Two has the option to repay the loan by issuing stock to the creditors.
Take-Two’s taken something a kicking since its earnings call this week, during which execs appeared flaky on SKU details after posting an eyebrow-raising loss in its second quarter.
Still. $100 million should pay for a few Diet Cokes in the next six months.