On the Verge of Bankruptcy THQ, Inc. (NASDAQ:THQI)
Posted by Todor Pichurov, Nov 13, 2012 14:19
Yesterday THQ, Inc. (NASDAQ:THQI) dipped another 14% down on the stock market to a close of $1.16.
Already bogged down by financial issues and having pushed back the releases of its 2012 flagship titles, THQ reported that they are in default over a rather large $50 million loan from Wells Fargo. Some analysts are already sizing up the company’s assets and intellectual property in case the worst case scenario plays out and THQI goes bankrupt.
A more probable but almost equally unpleasant scenario would be THQI resorting to private equity financing that would result in dilution for common stock shareholders.
With stock price having plummeted from early November values bordering $3 to its current position, and with long-term liabilities stacking to the staggering figure of $250 million, THQ were forced to push the preliminary release dates of their flagship titles, Company of Heroes 2 and Metro: Last Light, into March 2013. Those dates, even if tentative, are worrying as the end of Q1 is loaded with heavy hitters from other publishers that may leave THQ’s games on the sidelines again.
In an effort to squeeze what money it may from devoted fans, THQ released a complete edition of Saints Row: The Third, labeled “Full Package”. With Darksiders 2 turning into a day-one DLC fest in an effort to monetize on hardcore fans, THQ look like they are indeed in a tight spot.
The gaming market is making it increasingly obvious that you need franchises that are a huge commercial success to simply stay afloat. THQ seem to be somewhat of an acquired taste and despite producing some fine games, they may turn out to lack the bang needed to make it past the general market slump.
Both investors and fans of THQI franchises are left wishing the tag line of a Darksiders 2 trailer does not come true and Death does not indeed come for all.
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