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Credit a couple of threatened buyouts and the hope that more consolidation might be in store for keeping new-media stocks afloat even as the broader markets behaved horribly last month.
The Nasdaq dropped 5% in February, the S&P 500 dumped 3.5% and the Dow Jones Industrial Averages fell 3%. Outperforming all of them was The Hollywood Reporter's Showbiz 50 index, which was off just 1.2% last month.
Preventing more pain for new media were Take-Two Interactive Software and Yahoo, both Showbiz 50 stocks and both in play as of last month.
Yahoo shares jumped 45% after Microsoft said that it wanted to buy the company, an offer Yahoo has rejected. Take-Two shares leapt 61% on an offer from Electronic Arts that also was rejected.
Perhaps in sympathy with Take-Two, video game stocks in general outperformed broader markets in February, with Activision shares up 5% and THQ advancing 4%. Shares of Take-Two's hopeful acquirer EA, though, fell 3%.
Wedbush Morgan Securities analyst Michael Pachter, who issued a mea culpa for not recommending shares of Take-Two before the buyout offer, reiterated his "strong buy" rating on EA and $66 target, 40% higher than its February closing price of $47.29.
His target does not take into account a takeover of Take-Two, though if the smaller company continues to spurn the offer from its much bigger rival Pachter expects EA to acquire Take-Two shares on the open market.
Citibank analyst Brent Thill is more bullish, slapping a $69 target on EA shares, and he calls EA's $26-per-share bid for Take-Two "strategically sound." Shares of Take-Two closed the month at $26.50, suggesting Wall Street's confidence that Take-Two will get a better offer.
More bullish still is BMO Capital Markets analyst Edward Williams, who has a $70 target on EA shares.
"EA is well positioned to exploit the growth trajectory within interactive entertainment," Williams said.
As for Yahoo, Microsoft's offer last month was worth $44.6 billion, and many analysts think Yahoo will not be able to resist a sale given its long-sinking stock price amid perceived mismanagement. But the price tag could rise.
Yahoo shares finished February at $27.78, and the company signaled it would not accept an offer of less than $40 a share.
"We continue to recommend Yahoo shares, as we believe investors are likely to speculate on how high a revised bid could go," RBC Capital Markets analyst Jordan Rohan said.
Also trading higher in February were Netflix, up 26%, and EchoStar Holdings, up 37%, the latter being a two-month-old company that was split from Dish Network.
EchoStar reported a solid quarter -- the first quarter it ever reported since its split from Dish -- and Netflix raised guidance.
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