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Take-Two (TTWO) is off almost 5% today to $13.45 and it has traded within a penny of its 52-week low. That low was set when the company was operating in the shadow of incompetent management and an SEC investigation. The shares should not be there again now that a new management team is in place.

But, with the delay of the company’s premier product, "Grand Theft Auto", the stock has run down from over $21 on July 17

Bear Stearns upgraded the stock from "underperform" to "peer perform" this morning, which must be a bit humiliating.

The market’s concern about Take-Two is whether it has enough cash to get to the launch of its big game.

In its most recent 10-Q, the company reported a loss from operations of $51 million. The company’s cash on the balance sheet was just over $108 million. Receivables were $70 million and payables, accrued expenses, and other current liabilities were $210 million.

All of that taken together does not leave much of a buffer for a company with a $50 million operating loss.

The company does have access to capital, but it is the kind no company should want to take. It is a line of credit secured by receivables and the terms are onerous.

So, Take-Two is in a race against time. It cannot afford to lose much more money, but in revised guidance it says its revenue will fall far short of expectations and its losses will rise.

But, the stock won’t.

Douglas A. McIntyre