THQ Confirms "Reverse Stock Split"

THQ Confirms "Reverse Stock Split"

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THQ is going ahead with its plan to dodge a NASDAQ delisting.

It's been almost six months since THQ was warned that it would be deslited from the NASDAQ stock exchange if it didn't get its share price up over $1, yet it continues to languish well below that mark - a little under 60 cents at last check. With no sign of the stock catching fire any time soon, THQ unveiled "Plan B" at the end of May: a "reverse stock split" that would, pending shareholder approval, reduce the number of shares in the company but increase their individual value and thus fulfill the NASDAQ's requirements.

The reverse stock split was given the green light at a special meeting of stockholders on June 29, and today THQ announced that it is going ahead with the plan at a 1-for-10 ratio, meaning that as of July 9, every ten shares of issued and outstanding common stock in the company will become one. The actual number of shares in the company will go from approximately 68.5 million to 6.9 million, while the per-share value, based on the current price, will go to approximately $5.90.

The reverse split will put THQ's share price well above the NASDAQ's requirement, but there's no guarantee it will stay there. While opting for the 1:10 ratio will push the price well above the $1 mark (less drastic 1:3 and 1:5 ratios were also considered), the company warned that "there can be no assurance that the reverse stock split will have the desired effect of raising the closing bid price of THQ's common stock to above $1.00 per share" to meet the NASDAQ's minimum. There's some rather serious risk in the maneuver too; the stock is in the tank now, but by reducing the number of shares to force the price up, the company exposes its shareholders to even greater losses should the price slide back to anywhere near where it currently stands. Ten 60 cent stocks may not be worth much, but they're worth a lot more than one 60 cent stock.

Source: THQ Investor Relations

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Captcha: Prime Time
Indeed

So the company's valuation is around 40 million. Seems like they can barely afford to make games.

DVS BSTrD:
Start buying now!

Captcha: Prime Time
Indeed

Yeah... I can't tell if you're being sarcastic, or you don't understand what's happening.

THQ is screwed. Best case scenario, they get sold off for parts and someone good continues Warhammer 40k.

Azuaron:

THQ is screwed. Best case scenario, they get sold off for parts and someone good continues Warhammer 40k.

If anything, Games Workshop will buy Relic and handle things directly. Sort of like Disney Interactive or that BBC gaming thing.

saintdane05:

Azuaron:

THQ is screwed. Best case scenario, they get sold off for parts and someone good continues Warhammer 40k.

If anything, Games Workshop will buy Relic and handle things directly. Sort of like Disney Interactive or that BBC gaming thing.

Games Workshop have that kinda cash?

chiefohara:

Games Workshop has that kinda cash?

Fixed.

Anyway, I'm pretty sure the original rights would go back to them. Knowing novel sales and the price of figures, I'm pretty sure GW could make a few titles.

saintdane05:

chiefohara:

Games Workshop has that kinda cash?

Fixed.

Anyway, I'm pretty sure the original rights would go back to them. Knowing novel sales and the price of figures, I'm pretty sure GW could make a few titles.

Why did you only correct half the Grammar?

Anyway, a quick sconce over the market share price has them down at 173.43 million. Not sure they'd risk spending $40 million on acquiring Relic. Not to mention that one of the comments states that a disproportionate amount of their income is from royalties.

http://www.lse.co.uk/SharePrice.asp?shareprice=GAW

chiefohara:

saintdane05:

chiefohara:

Games Workshop has that kinda cash?

Fixed.

Anyway, I'm pretty sure the original rights would go back to them. Knowing novel sales and the price of figures, I'm pretty sure GW could make a few titles.

Why did you only correct half the Grammar?

Anyway, a quick sconce over the market share price has them down at 173.43 million. Not sure they'd risk spending $40 million on acquiring Relic. Not to mention that one of the comments states that a disproportionate amount of their income is from royalties.

http://www.lse.co.uk/SharePrice.asp?shareprice=GAW

They don't need to buy relic. They can wait for the studio to go under and they can hire the relic employees themselves and open their own studio.

OT: I don't want them going anywhere, they are one of the last good major publishers who don't treat their customer base like shit, I hope this works out. Really, they only need to stay above a dollar for like 10 days to avoid delisting. I think they can make it back after that with some good releases. And they have some good ones coming up.

Baresark:

chiefohara:

saintdane05:

Fixed.

Anyway, I'm pretty sure the original rights would go back to them. Knowing novel sales and the price of figures, I'm pretty sure GW could make a few titles.

Why did you only correct half the Grammar?

Anyway, a quick sconce over the market share price has them down at 173.43 million. Not sure they'd risk spending $40 million on acquiring Relic. Not to mention that one of the comments states that a disproportionate amount of their income is from royalties.

http://www.lse.co.uk/SharePrice.asp?shareprice=GAW

They don't need to buy relic. They can wait for the studio to go under and they can hire the relic employees themselves and open their own studio.

OT: I don't want them going anywhere, they are one of the last good major publishers who don't treat their customer base like shit, I hope this works out. Really, they only need to stay above a dollar for like 10 days to avoid delisting. I think they can make it back after that with some good releases. And they have some good ones coming up.

I agree, Im hoping THQ pull through as well. They are a good publisher and i'd be sorry to see them go.

For as much as it'd be a shame if THQ did go, I'm getting the feeling they will. It'd be one of the greatest business recoveries in the industry's history if they came back, but ultimately it I doubt that'll come to pass. Here's hoping that all the games they have in the pipeline get released before they sink or get handed off to someone who knows what they're doing.

Pleeeeeeaaaaase let this work out. I would absolutely hate to see THQ go under, they need to pull through this somehow! :\

Baresark:
They don't need to buy relic. They can wait for the studio to go under and they can hire the relic employees themselves and open their own studio.

It depends on what the IP contract for Warhammer 40k says. If it is transferable THQ will probably have to sell it to pay off there liabilities, $425.12 mill. as of March, and if that is the case Games Workshop would have to bid against other companies trying to buy the IP, I bet EA or Activision would love to acquire the Warhammer 40k video game IP.

 

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