THQ Facing NASDAQ Delisting
By any measure, it has been a rotten couple of months for THQ. Despite the success of Saints Row: The Third, (4 million copies sold since November), THQ’s stock price dropped below one dollar in early December, where it has stayed ever since. Soon after, they faced rumors that the company would be sold off, a former employee excoriated the company’s business practices in a letter to the Board, and they abruptly cancelled their kids’ games division. Yesterday, rumors that they had laid off 14 of their remaining Australian employees and are planning to axe their Japanese division only furthered the impression that the company is floundering.
Today, things got worse. MCV is reporting that earlier today, THQ was informed that because their stock has been valued at less than one dollar for more than 30 days, they are facing a NASDAQ delisting. The developer has been given 180 days, until July 23rd, to rectify this problem, after which the stock must remain above one dollar for at least 10 days, or face removal from NASDAQ. SHould they fail, they’ll have the chance to appeal the decision, but by that point it will be all but over for them on the stock exchange. It would not be wise then to miss this deadline.
So far, the company has issued no statements regarding this threat, or the rumored layoffs and closure of THQ Japan. That alone is enough to conclude things are dodgy. The threat of a delisting will likely cause investor confidence to plummet and make it even harder for the company’s shares to trade robustly. Should the offer official comment, we’ll let you know.