Troubled publisher THQ has furthered its plans to stay listed on the stock exchange, as it today announced that its stockholders have approved a reverse split of its common stock.
The Nasdaq stock exchange told THQ In January
that the Saints Row
publisher had 180 days to raise its stock prices above the minimum threshold, or else it would be delisted.
With that time running out, THQ planned to effect a reverse split of its common stock
, to regain compliance with Nasdaq's $1.00 minimum bid requirement. The move is aimed at reducing the total number of THQ's issued and outstanding common shares, which will lead to an increase in the price per share.
The company's board of directors has set the effective date of the reverse stock split for July 5, with a fixed ratio of 1-for-10 -- that is, every ten shares of THQ's issued and outstanding common stock will be converted into one share without any change in the value per share. The shares will then begin trading on July 9.
The move will reduce the number of shares in THQ from 68.5 million to around 6.9 million -- authorized shares of the company's common stock will not be affected by the reserve stock split said the company.
Gamasutra predicted that
THQ would go down this road back in January, with Gamasutra editor-at-large Chris Morris suggesting this would be the method used by the company to remedy the situation.
THQ has until July 23, 2012 to regain compliance with the Nasdaq, at which point the closing bid price for THQ's common stock must have been above $1.00 for at least 10 consecutive business days.