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THQ Stocks Drop Like it's mother doesn't want it anymore

This is a discussion on THQ Stocks Drop Like it's mother doesn't want it anymore within the General PS3 Discussion forum, part of the Everything PlayStation; THQ Falls as Analyst Cites ‘Liquidity Crisis’: Los Angeles Mover - Businessweek Feb. 3 (Bloomberg) -- THQ Inc., the video-game ...

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    THQ Stocks Drop Like it's mother doesn't want it anymore

    Feb. 3 (Bloomberg) -- THQ Inc., the video-game maker that reported a quarterly loss yesterday, tumbled 30 percent after an analyst said the company may need to draw on a revolving line of credit.


    THQ, based in Agoura Hills, California, declined to 53 cents at 4 p.m. New York time, the lowest close since July 1995. The company has a $50 million revolving credit facility, according to a Nov. 9 regulatory filing.


    Todd Mitchell, an analyst with Brean Murray Carret & Co. in New York, said the cancellation of the uDraw game tablet has created “a liquidity crisis for the company that puts its viability in question.” He estimated the project will end up costing THQ $100 million, according to a note today. Mitchell has a “hold” rating on the stock.


    “We were looking at uDraw as a bridge to this core and digital future, and that bridge turned out to be a plank we walked off of,” Chairman and Chief Executive Officer Brian Farrell said on a conference call yesterday.


    Farrell said uDraw’s “underperformance in the quarter had the single biggest impact on our financial results.” THQ will cut 240 jobs and reduce its CEO’s pay by 50 percent after reporting a net loss of $55.9 million, or 82 cents a share, for the fiscal third quarter.


    The company reported sales of $305.4 million. Excluding some items, profit was $24 million, or 35 cents a share, THQ said. The video-game maker had $47.7 million in cash and equivalents on hand when the quarter ended on Dec. 31.
    ‘Leaner Cost Structure’


    Farrell’s salary will drop to $359,250 from $718,500 for a one-year period, according to a filing with U.S. Securities and Exchange Commission. Cash compensation for the company’s board members also was cut by half, according to the filing.


    “With our focused product plan, leaner cost structure, cash balance and existing credit facility, we believe the company has adequate resources to deliver on our strong multiyear pipeline of games,” Farrell said on the call.


    THQ said today it reached an agreement with Los Angeles- based Innovative Leisure LLC to create and publish games for digital and mobile platforms starting this year.


    “Innovative Leisure has the expertise to deliver remarkable and cutting-edge games,” Danny Bilson, a THQ executive vice president, said in a statement.


    Farrell said on the call that new home console introductions could reinvigorate sales.
    “As we approach a potential new console cycle it does introduce an element of risk,” Farrell said. “Another way to think about that is it does present a tremendous amount of opportunity.”


    About 44 percent of THQ’s games were made for Nintendo Co.’s Wii console, which has seen two years of declining sales as consumers opt for Microsoft Corp.’s Xbox 360 and Sony Corp.’s PlayStation 3. Those consoles play games in high-definition and offer online downloads of movies and music.


    Nintendo has said it will begin selling a high-definition Wii U console by year-end. Microsoft also may be preparing an update to its Xbox 360 console, according to reports.

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    It sucks

    They've delayed Metro: Last Light, and that Warhammer MMO might not even be happening.

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    I'm starting to doubt they'll be able to pull off a reasonable income with just a few games getting released this year. This might as well be the end of THQ lol.

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    Curse you uDraw tablets! I don't want the best wrestling game developer to go out of business.
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    Anybody wanna buy my uDraw tablet? $1.49.


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    As much as I dislike their movie/TV tie ins, it really was a bit stupid of them to just go and abandon them from an economic point of view. They have the reputation for making those games, and despite stating that they have decided to change direction, it will take at least a couple of years to shake that image off. Therefore, I think that they will struggle in both 2012 and 2013.

    Firstly because of the image problem stated above, and secondly because if they are going into the core market, they need to think up some new core games pretty damn quickly. Whilst they may have about 10 games sorted for this year, it appears that the only have about 4 games being released in 2013. Unless you are releasing an established AAA title, there is no way in hell that you are making any sort of profit on only 4 games. They need to get some games in development NOW.
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    if i had money i would be buying loads of stock in thq right now

    the warhammer 40k MMO is going to be big

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    Quote Originally Posted by Ps360 View Post
    if i had money i would be buying loads of stock in thq right now

    the warhammer 40k MMO is going to be big
    Indeed, it'll probably be very popular due to Warhammer's big fanbase regardless of quality.

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    Trying the casual market actually didn´t work?
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    This says more about the Wii and uDraw tablet than THQ's ability to produce solid games.
    It doesn't bode well for sales of the Wii U's silly tablet controller.

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    Quote Originally Posted by ant1th3s1s View Post
    This says more about the Wii and uDraw tablet than THQ's ability to produce solid games.
    It doesn't bode well for sales of the Wii U's silly tablet controller.
    The funny thing is that the uDraw tablet and games were pretty successful on the Wii. Its only when they decided to branch out into the PS3 and 360 did it really fail and cost them to lose millions.
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    Dang, that sucks. I always enjoyed their WWE games.

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    Quote Originally Posted by antoniosbandana View Post
    Anybody wanna buy my uDraw tablet? $1.49.
    i would buy it for that if you are serious......lol
    http://www.mrrebates.com?refid=969355


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    Now who will look at my Instant Artist and Pictionary guides

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