Yahoo Finance Facebook Stumbles Midday; Take-Two Takes a Surprise Tumble
Investing.com - Facebook (NASDAQ:FB) fell in midday trading as it is reportedly set to face more regulatory scrutiny in Europe, while videogame stocks slid despite a solid earnings report from Take-Two Interactive .
Facebook fell about 2.4% at 12:00 PM ET (17:00 GMT).
EU Competition Chief Margrethe Vestager is considering whether to probe the social networking company’s European tax arrangements, Politico reported, citing two people close to the case.
Vestager has already seized documents relating to Facebook’s Irish tax deals, a former Irish civil servant told Politico.
It’s not surprising the stock is taking a breather as investors took some profits following yesterday’s rally and waited for the Fed decision this afternoon.
But a surprising move came in videogame stocks, where Take-Two Interactive (NASDAQ:TTWO) fell about 4.0% despite posting a strong profit and boosting guidance.
“As a result of our strong second quarter performance and outstanding early results from Red Dead Redemption 2, we are raising our financial outlook for fiscal 2019, which is also poised to be a record year for Net Bookings and Adjusted Operating Cash Flow,” the company said in its earnings release.
One reason for the selloff may be that despite the strong earnings, sales were well short of expectations.
Another could be the company being a victim of its own success, as there were concerns the “Red Dead Redemption” franchise could draw gamer attention and dollars away from the “Grand Theft Auto” franchise.
“We do not see any cannibalization, nor do I expect any,” Take-Two Chief Executive Strauss Zelnick said on the earnings call, The Wall Street Journal reported.
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