For those who don't know, THQ is not doing so well. Their stock is on the verge of being de-listed from the NASDAQ Stock Exchange because they have been trading under $1.00 per share for several months.
On January 31, 2012 they were warned by NASDAQ that if they continue having a Stock Value below $1.00 per share they will be de-listed. They were told they have Six (6) Months to get their stock price up or they will be de-listed, which is currently set for July 23rd.
Recently, THQ has announced plans to do a Reverse-Stock-Split so that they can increase their stock price above the $1.00 needed. They must maintain the $1.00 or more Share Price for Ten (10) Consecutive Days to avoid being de-listed.
Doing a Reverse-Stock-Split means that they will take their existing shares and consolidate them. Their current plans are either 1:3, 1:5 or 1:10. This means that for a Stock Holder every 3, 5 or 10 shares that they own will forcefully turn into a Single Share. Example: If you own 100 shares of THQ and they do a 1:5 Reverse-Stock-Split then you will only have 20 shares, but the price/value of the stock should increase respectively.
Doing this removes a lot of the stock that is already out there, which can cause Investors to become uneasy and many may decide to pull-out and not be apart of it. When a company does a Reverse-Stock-Split it usually means they are in dire straits, and the fact that THQ just posted a near-$250 Million Loss for their May, 2012 Fiscal Year End does not bode well for the company.
Honestly, I think THQ is in very big trouble. If they are de-listed from the Stock Market, their company will be in major trouble and could spell the beginning of the end for THQ. Even if they are able to do the Reverse-Stock-Split they will still face stiff criticism from Share Holders and could further damage their image. After posting so many losses quarter-after-quarter, even if they manage to get their stock to several dollars, it will immediately plummet again as they're not showing any profits and so many deep losses, ultimately putting them back in this position but in an even worse way.
This month will prove tremendously pivotal to the future of THQ. I honestly would like to see THQ get de-listed, as it will send a message to other companies that they need to treat consumers better and release higher-caliber games that satisfy the communities desires. The sad part is people will likely be Laid-Off and out of work, something that is truly horrible and was caused by the Top-Execs getting way too greedy.
A meeting with investors is scheduled for June 29 to attempt to come up with a solution. Let's see how it rolls out.
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