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THQ may be delisted from Nasdaq in July
by Mike Rose [Console/PC, Business]
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January 31, 2012
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The Nasdaq stock exchange told THQ on Tuesday that the Saints Row publisher has 180 days to raise its stock prices above the minimum threshold, or else it will be delisted.
The decline of THQ has been a long and drawn-out affair. The publisher looked like it would be a strong contender in the games publishing arena back in 2007, when stock prices peaked at over $35 per share on the back of licensed video games like Pixar's Cars.
But there's a much different story today. The company has until July 23 to maintain a share price of $1 per share for 10 consecutive days. Its stock is currently listed at 70 cents per share, and falling.
The delisting warning comes just after analysts predicted that THQ may have run out of cash by the first quarter of the next fiscal year.
And the publisher has been undergoing significant restructuring just this month. Last week, THQ announced that it would completely exit the once-lucrative licensed kids game business, and reports emerged that the company was laying off staff in Australia, and closing its Japan studio. Last year saw even bigger layoffs in Australia.
As noted by Gamasutra's Chris Morris earlier this month, this warning does not mean that a delisting is certain, as THQ has a number of methods for remedying the situation.
In case the stock doesn't turn around of its own accord, the company may choose to solve the problem via a reverse stock split, which would essentially reduce the number of total shares, so each one is more valuable.
If this doesn't work, there's still an opportunity for a hearing that could extend the probationary period -- if THQ can point to a strong lineup of games in development, that could be enough to convince Nasdaq to give it some extra time.
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There was no Japan studio when I worked at THQ a few years ago. Did they recently open one, just to close it?
I think people are also confused because THQ are publishing Devil's Third made by Valhalla Game Studios in Japan (but they don't own VGS).
THQ's stock spent nearly the entire year of 1995 below $1 before it finally came back up. And Majesco (COOL) spent about 9 months under $1 recently before it too got above $1.
They shot off blanks with HomeFront and they let people like this guy:
http://gamasutra.com/view/news/34097/Analysis_THQs_Long_Farewell_To_Creative_Med
iocrity.php
run it into the ground. All of them should be fired.
I hope affected developers can leave while they can and land a good gig elsewhere.
unfortunately we're going to see a lot of this kind of thing.
I wouldn't be surprised if WB is next on the list of struggling game divisions.