THQ Could Face Sale or Bankruptcy After $21 Million Loss
Wedbush Morgan’s Michael Pachter deems THQ as “not investable for most institutions”.
And here we thought the delay of key titles was due to product quality. THQ has actually been reeling from $21 million USD in losses, with games like Darksiders 2 under performing immensely since release with only 1.4 million copies sold.
Wedbush Morgan’s Michael Pachter painted a very grim picture of the future of THQ. “Should its financial position continue to deteriorate, 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.”
“Although THQ has been able to lower its cost structure through layoffs and a streamlined release slate in order to temporarily improve profitability, it is unlikely to return to profitability unless its revenues once again begin to grow,” stated Pachter. He finished by stating, “We do not believe THQ is investable for most institutions.”