Take-Two Shareholders Revolt, Oust CEO

By Ed Oswald, BetaNews

March 30, 2007, 12:12 PM

Gaming company Take-Two has undergone massive management change as a group of shareholders owning nearly half of the company were successful in removing the entire board and chief executive.

The group hopes that the sweeping change will help the videogame maker regain its financial footing and recover from problems related to a stock-options scandal and other issues, which caused the company to become unprofitable.

Benjamin Feder has been named acting CEO, and Strauss Zelnick would be chairman. All six directors have been replaced, although one ousted board member was reappointed, expanding the board to seven members.

Financial analysts say that the move was unusual considering none of those involved have traditionally been involved in similar uprisings. At the same time, however, analysts applauded the companies for stepping up to address Take-Two's deepening financial problems.

In a press conference, Zelnick dismissed rumors of a sale of the company, saying that is not an option at this time. Rather, the new management team will spend the next few months attempting to get the company's financials into "pristine" shape.

A plan would be announced in less than six months, although it is not expected to include job cuts.

A vote among the general shareholder population did not occur. Rather, the group motioned to hold elections for new directors at the company's meeting itself. Only about 100 shareholders were admitted to the meeting.