THQ Announces New President, Reverse Stock Split
THQ announced today two major changes in store for their business, each with powerful, if uncertain, implications for the future health of the ailing developer, and each something of a surprise.
First, the Agora Hills-based company announced that Naughty Dog co-founder Jason Rubin has been appointed President of THQ, effective immediately. Rubin will report directly to CEO Brian Farrell, who in a press statement said of the appointment that “Jason’s proven track record in the industry speaks for itself, and he is one of the brightest minds in the business.” Farrell also referred back to a statement from THQ’s February, 2012 investor call, saying “We believe he can be a game changer and can contribute immensely to executing on our strategy of delivering quality connected core game experiences.”
After a brutal year which included closed subsidiaries, cancelled games, and lots of layoffs, CEO Brian Farrell took a 50% pay cut, and THQ confirmed their intent to abandon kids games, casual games, even the MMO they were working on, all in order to deliver on their ‘core’ franchises, AAA games for serious players. Rubin, who recently left Fox Interactive, will oversee this transition, which includes the production of upcoming games like Saints Row: Enter The Dominatrix, Darksiders® II, and others due out in Fiscal year 2013.
Rubin’s immediate focus, however, will surely be preventing THQ’s removal from the NASDAQ exchange. In January, THQ was informed that because their stock price has been below 1$ per share for more than 30 days, they risk a delisting, a death knell for a publicly traded company. They were given 180 days, until July 23, to turn things around. That deadline is looming, and THQ announced today an unusual solution to the dilemma. They will be requesting what is known as a reverse stock split’.
In a stock split, a company divides existing shares in order to create more for trading. The split devalues each share, with the total value of the company distributed over a larger number of them. A reverse stock split is just what it sounds like: by the magic of paper work, individual shares will be combined, increasing their value. It sounds shady, but it’s legal, and NASDAQ accepts the technique. It isn’t risk free of course. AMong other possible nightmare scenarios, the company stock could easily decline in value to their current place even after the action is taken. If that happens, the reverse stock-split option wouldn’t be available to them a second time.
THQ will ask shareholders to vote on the proposed action June 29th. If approved, they’ll have just under a month to take care of the paperwork before the deadline passes.
Here is the press release announcing Rubin’s appointment.
Appointment of Industry Veteran Underpins New Game Development Strategy
AGOURA HILLS, Calif.–(BUSINESS WIRE)– THQ Inc. (NASDAQ: THQI) announced today that it has appointed Jason Rubin as President, effective immediately. Mr. Rubin, who brings to THQ 20 years of successful experience in the video game and digital sectors, will be responsible for all of THQ’s worldwide product development, marketing, and publishing operations, and will report to Brian Farrell, THQ Chairman and CEO.
Mr. Rubin is acknowledged as one of the leading business and creative forces in the video game industry. He co-founded Naughty Dog, one of the industry’s most successful and critically acclaimed game developers. While at Naughty Dog, Mr. Rubin served as the co-creator and game director of the “Crash Bandicoot” PlayStation and “Jak and Daxter” PlayStation 2 series of games, which combined have sold over 40 million copies worldwide. In 2001, Sony Computer Entertainment America acquired Naughty Dog, and Mr. Rubin led the Naughty Dog team until 2004. Mr. Rubin also co-founded Flektor, a media mashup tool, which was acquired in 2007 by Fox Interactive Media, a division of Newscorp.
“Jason’s proven track record in the industry speaks for itself, and he is one of the brightest minds in the business,” said Brian Farrell. “We believe he can be a game changer and can contribute immensely to executing on our strategy of delivering quality connected core game experiences.”
“THQ has incredible internal and external game development teams, and an exciting slate of games in its development pipeline,” said Jason Rubin. “The recent transformation of THQ into a creator of wholly-owned IP has placed it in a perfect position to leverage future trends in the game business. I look forward to working with the management team and board to realize the company’s goals.”
Rubin’s appointment comes as THQ realigns its focus from a maker of licensed games for broad audiences to a developer of AAA “Core” games for multiple platforms. For Fiscal 2013, the company’s line-up includes wholly-owned IP from Vigil Games (Darksiders® II), Volition, Inc. (Saint’s Row®: The Third™ – Enter the Dominatrix), Relic Entertainment (Company of Heroes® 2) as well as Metro: Last Light, South Park™: The Game and WWE® ‘13.
The company also has appointed Jason Kay as its Chief Strategy Officer. Mr. Kay, who will report to Mr. Rubin, co-founded Flektor with Mr. Rubin and has served as an executive and advisor to companies such as Activision, Columbia House and Home Box Office during his more than seventeen years in the media and technology business.
THQ also announced that Danny Bilson, EVP Core Games, is leaving to pursue other interests. “Danny has made significant contributions to THQ, and we thank him for his efforts,” said Mr. Farrell. In addition, the company announced that Dave Davis, SVP Core Studios, will be leaving. “Along with Danny, Dave has been instrumental in getting our strong pipeline into production,” Mr. Farrell continued.
THQ Inc. (NASDAQ: THQI) is a leading worldwide developer and publisher of interactive entertainment software. The company develops its products for all popular game systems, personal computers, wireless devices and the Internet. Headquartered in Los Angeles County, California, THQ sells product through its global network of offices located throughout North America, Europe and Asia Pacific. More information about THQ and its products may be found at http://www.thq.com/. THQ, Company of Heroes, Darksiders, Saints Row, Saints Row: The Third – Enter the Dominatrix and their respective logos are trademarks and/or registered trademarks of THQ Inc.
All other trademarks are property of their respective owners.
THQ Inc. Caution Concerning Forward-Looking Statements
This press release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates and projections about the business of THQ Inc. and its subsidiaries (collectively referred to as “THQ”), including, but not limited to statements regarding the company’s future business goals and expectations and future video game line-up. These statements are based upon management’s current beliefs and certain assumptions made by management. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including, but not limited to, business, competitive, economic, legal, political, and technological factors affecting our industry, operations, markets, products, or pricing. Readers should carefully review the risk factors and the information that could materially affect THQ’s financial results, described in other documents that THQ files from time to time with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal period ended March 31, 2011 and subsequent Quarterly Reports on Form 10-Q, and particularly the discussion of trends and risk factors set forth therein. Unless otherwise required by law, THQ disclaims any obligation to update its view on any such risks or uncertainties or to revise or publicly release the results of any revision to these forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.