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Atari Gets Delisting Warning From Nasdaq
by Frank Cifaldi
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March 9, 2006
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Troubled game publisher/developer Atari has been given an ultimatum from Nasdaq that it has until April 30 to get its minimum shares above $1 for ten consecutive days, or it will lose its listing on the major U.S. stock exchange.
Last month, Atari posted disappointing sales numbers for the first quarter fiscal year 2006 (the period ending December 31, 2005), earning only $100.8 million, a 36% decrease on its Q3 2005 revenue of $156.4, in an aggravated version of the continuing overall market weakness. Due to the lower income, Atari posted a net loss of $4.8 million, compared to its profit of $19.6 million in Q3 2005.
Shortly afterwards, Atari delayed its official SEC filing, causing shares to plummet for parent company Infogrames. Additionally, Atari announced a twenty percent staff reduction, and CEO Bruce Bonnell commented to British trade paper MCV that the company planned to sell off its internal game studios.
No such sales have yet been reported, but with the number of studios owned by the company, including Reflections (Driver 4), Melbourne House (currently work on a title in the Test Drive series), Paradigm (Stuntman 2, Battlezone) and Shiny Studios (Earthworm Jim), Atari is certainly not short of options. However, it's unclear whether this would improve the long-term prospects for the company, following disappointing financial results and continuing debt issues.
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