THQ Stock Price Crashes

Andy Chalk

One Flag, One Fleet, One Cat
Nov 12, 2002
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THQ Stock Price Crashes


The worst possible outcome of THQ's "reverse stock split" appears to be coming true.

THQ executed a "reverse stock split" in July [http://www.escapistmagazine.com/news/view/118671-THQ-Dodges-Delisting], converting every ten shares of stock in the company into one, pushing the price up to $5.80 in the process. The move was made to avoid a looming NASDAQ delisting and it worked, but it carried with it a risk of even greater trouble ahead if the stock sunk back down to its pre-split low, because at that point there'd be nothing left to do but burn it, bury it and salt the earth.

Alas, in the wake of a genuinely ugly earnings call [http://www.escapistmagazine.com/news/view/120512-THQ-Earnings-Call-Gives-Little-Reason-for-Confidence] and a shocking refusal by the company to provide sales and earnings guidance for FY2013 and beyond, that's exactly what has happened. THQ's share price had been sliding since the reverse split but took a gut-sucking nosedive of more than 47 percent this morning to wind up at $1.60 at last check. The company's market capitalization, a rough measure of its overall value, stood at just north of $42 million at the end of June; it's now less than $11.6 million.

The trouble for THQ is that the reverse stock split was a dodge, a mechanism for artificially inflating the price without actually changing anything. But it was a purely short-term maneuver that required a seriously impressive follow-up to convince investors that a meaningful turnaround was underway. That didn't happen, and now the company is in an even worse position, with very few "Plan B" options available.

Sources: YCharts [https://www.google.com/finance?client=ob&q=NASDAQ:THQI]


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Slycne

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Feb 19, 2006
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DVS BSTrD said:

Well that didn't take long. They split on their investors, now their investors are splitting on them.
Tell that to Relic Entertainment, Vigil Games and Volition, who are all genuinely talented developers that will be affected by THQ's mismanagement.
 

Andy Shandy

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Jun 7, 2010
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Oh god, this means Pachter could actually be right! We can't allow this to happen!

If THQ does end up going under I'll be rather saddened as they've published some good games down the years :/

How did it actually end up getting this bad anyway?
 

gigastar

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Sep 13, 2010
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So THQ's fate will depend on the success of thier upcoming cluster of releases.

Though quite frankly, they probably deserved it for thinking that uDraw was a good idea.

Andy Shandy said:
How did it actually end up getting this bad anyway?
Started with Homefront, a Modern Military FPS (thats a genre now) which only distinguished itself with a marketing campaign which i think they were fined for after that stunt in San Francisco. As we all know it flopped and its home studio was gutted for it.

But the thing that hit hardest by far was the uDraw, which is listed as a commercial failure in video gaming on Wikipedia [http://en.wikipedia.org/wiki/List_of_commercial_failures_in_video_gaming#.C5.8Ckami].
 

gentlemanghost

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Jul 7, 2011
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Well, I WANTED to play "South Park - The Stick of Truth" and maybe even the new "Metro 2033" game, and I had hoped for "Saints Row 4," but THQ appears to be TH Through.
 

Entitled

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I would be happier if this would happen to Ubisoft or EA, but this one still just another AAA studio anyways, so it's good enough for now.
 

Fappy

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I'm beginning to think a buy-out will be the best case scenario for THQ at this point.
 

Nihlus2

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Fappy said:
I'm beginning to think a buy-out will be the best case scenario for THQ at this point.
Which is not really a comforting thought, considering who the primary buy-out'ers might be.
 

Fappy

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Nihlus2 said:
Fappy said:
I'm beginning to think a buy-out will be the best case scenario for THQ at this point.
Which is not really a comforting thought, considering who the primary buy-out'ers might be.
I don't want to think about it :(
 

getoffmycloud

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Jun 13, 2011
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Fappy said:
Nihlus2 said:
Fappy said:
I'm beginning to think a buy-out will be the best case scenario for THQ at this point.
Which is not really a comforting thought, considering who the primary buy-out'ers might be.
I don't want to think about it :(
Just hope and pray that it is take-two that would be the best outcome.
 

Andy Shandy

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Jun 7, 2010
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gigastar said:
Oh Christ, I completely forgot about the mess that was the uDraw thing. Who the bloody hell though that was a good idea? XD
Fappy said:
Nihlus2 said:
Fappy said:
I'm beginning to think a buy-out will be the best case scenario for THQ at this point.
Which is not really a comforting thought, considering who the primary buy-out'ers might be.
I don't want to think about it :(
Let us all pray that Valve could perhaps find some of the stuff interesting enough to make sure it doesn't fall into EA's grubby mitts.
 

Icehearted

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Nihlus2 said:
Fappy said:
I'm beginning to think a buy-out will be the best case scenario for THQ at this point.
Which is not really a comforting thought, considering who the primary buy-out'ers might be.
Ha! For some reason the Imperial March just popped into my head.

Sorry for the fans, but if things swing in that direction, THQ brought it on themselves. To their credit it would be because of necessity and not simply selling out like "other" companies chose to.
 

gigastar

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Sep 13, 2010
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Andy Shandy said:
gigastar said:
Oh Christ, I completely forgot about the mess that was the uDraw thing. Who the bloody hell though that was a good idea? XD
Fappy said:
Nihlus2 said:
Fappy said:
I'm beginning to think a buy-out will be the best case scenario for THQ at this point.
Which is not really a comforting thought, considering who the primary buy-out'ers might be.
I don't want to think about it :(
Let us all pray that Valve could perhaps find some of the stuff interesting enough to make sure it doesn't fall into EA's grubby mitts.
Quite frankly Valve isnt in the habit of purchasing companies. I think Take Two would be best suited to buy them, if only for thier remaining quality developers.
 

Andy Shandy

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Jun 7, 2010
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gigastar said:
Andy Shandy said:
gigastar said:
Oh Christ, I completely forgot about the mess that was the uDraw thing. Who the bloody hell though that was a good idea? XD
Fappy said:
Nihlus2 said:
Fappy said:
I'm beginning to think a buy-out will be the best case scenario for THQ at this point.
Which is not really a comforting thought, considering who the primary buy-out'ers might be.
I don't want to think about it :(
Let us all pray that Valve could perhaps find some of the stuff interesting enough to make sure it doesn't fall into EA's grubby mitts.
Quite frankly Valve isnt in the habit of purchasing companies. I think Take Two would be best suited to buy them, if only for thier remaining quality developers.
Hmm...Take Two could work quite well. I just completely forgot about them.

Anyone besides EA or Activision would be preferable.