Embattled game peripheral maker Mad Catz told the world today that it received a message from the New York Stock Exchange (NYSE) last week that it must effect a “sustained improvement in its share price” within six months or be delisted.
Such warnings often presage deep trouble for game companies (think: THQ, Midway, and Majesco, for example) but they don’t always mean the end. Mad Catz representatives state the company will try to win shareholder approval for a reverse stock split at its upcoming annual shareholders meeting.
Such a move could, by cutting down on the number of traded shares, potentially increase the company’s share value enough to remain on the NYSE. At the time of publication, Mad Catz shares are valued at $0.15 apiece; that’s a problem because, in order to be listed on the New York Stock Exchange, every company is required to maintain a minimum average closing price of $1.00 per share over 30 consecutive trading days.
Mad Catz appears to be in this situation because it had a rough 2016. Last year the company sold off its entire Saitek division for $13 million after reporting a full-year loss of $11 million and laying off ~37 percent of staff in a cost-cutting restructuring plan; these actions were attributed in part to unexpected shortcomings following Mad Catz’s decision to co-publish (and make hardware for) Harmonix’s 2015 game Rock Band 4.