It’s no secret that game publisher THQ has been in a bad position financially, and its rock-bottom stock price has only cemented that sentiment amongst industry analysts and investors. The company today announced, however, that it will be introducing a “reverse stock split”, approved by its Board of Directors late last month, with the aim of raising their share price to the $1.00 minimum demanded by NASDAQ.
Essentially, the number of shares is being drastically reduced, combining ten shares into a single share. Number wise, the total number of THQ shares is going to go down from approximately 68.5 million shares to approximately 6.9 million shares. That’s a big jump, but the idea is that this will boost the value of a single share, since it now represents a larger portion of the company (by a factor of ten).
Fractional shares are being eliminated, so shareholders with such shares are being given a cash payment instead, the value of which is “based on the average closing price of the common stock on the NASDAQ Global Select Market for the five consecutive trading days immediately before the record date of the reverse stock split”.
THQ’s efforts to continue trading in NASDAQ in advance of the high-profile launch of Darksiders II next month might bag them a little boost, but right now, things are still looking grim for the firm, who also just announced that planned DLC for Saint’s Row: The Third would instead become part of a seemingly rushed fourth Sain’ts Row instalment.