THQ's stock has tumbled 50 per cent after posting a second-quarter loss, dropping its market value to less than US$11 million.
Is the writing on the wall for THQ?
THQ stock is currently trading at US$1.54, down 50 per cent and marking the biggest drop for the company in over 20 years.
In the past two years, the shares have actually declined by 96 per cent, and THQ is currently valued at under US$11 million, or, as been pointed out on the NeoGAF forum, about one third of the budget of a AAA gaming title.
THQ's massive drop.
(Screenshot by Nic Healey/CNET Australia)
The freefall came at the back of yet another reported loss for the second quarter — the company has now lost money for 18 months straight — along with news that three of THQ's upcoming titles, Company of Heroes 2, Metro: Last Light and South Park: The Stick of Truth, have been delayed.
THQ has said that it will likely need to seek additional capital from investors in the wake of this news, and Michael Pachter, an analyst with Wedbush Securities, noted:
We expect THQ to raise financing through an equity sale that could lead to dilution of existing shareholders. We expect creditors to be asked to renegotiate terms at a discount. If they are unwilling, bankruptcy is possible.
THQ has suffered in recent months, losing around US$100 million on the uDraw gaming tablet and shifting only around 1.4 million units of Darksiders 2, as well as missing a beat with its push toward mobile gaming and away from consoles. In October this year, THQ Asia Pacific shut its offices in Australia and handed its distribution business to All Interactive Entertainment.