Troubled peripheral maker Mad Catz has received a notice from the New York Stock Exchange warning that, due to the company’s low selling share price, the company will be delisted unless it can show "a sustained improvement in its share price" within the next six months.
Mad Catz received the notice last week and has stated that it will "seek shareholder approval to effectuate a reverse stock split of the company’s currently issued and outstanding common stock at its next annual meeting."
It also added that the company’s board of directors are "currently assessing the appropriate ratio of post-split shares for every pre-split shares that would best serve the company’s stockholders while allowing the Company to remain compliant with the NYSE MKT’s continued listing requirements."
This sort of notice is never a good sign for game companies, but as Gamasutra notes, if Mad Catz manages to successfully cut down the number of traded shares it has, it could potentially prompt a big enough rise in share value to prevent it from becoming delisted on the New York Stock Exchange.
Right now, Mad Catz shares are worth $0.15 each, but the New York Stock Exchange requires that companies maintain a minimum average closing price of at least $1.00 apiece over 30 consecutive trading days.
Mad Catz hasn’t had the best year, all told. In 2016, the company laid off 37 per cent of its staff in February after Rock Band 4’s dismal performance at the tills, a title which Mad Catz co-published with Harmonix. Its president and CEO Darren Richardson also stepped down at the same time, along with chairman Thomas Brown and senior vice president of business affairs Whitney Peterson. The restructure cost the company around $3m at the time, but it was hoped it would offer annual savings of around $5m. The company also sold its entire range of Saitek peripherals to Logitech last September. Logitech bought the Saitek brand for just $13m.