Majesco plans reverse stock split to dodge delisting

Cooking Mama and Zumba publisher Majesco is readying to appeal a Nasdaq stock delisting expected next week, as the firm is currently trading under the $1/share minimum.

Majesco Chief Financial Officer Michael Vesey told Joystiq the company will seek a reverse stock split between 1-for-3 and 1-for-10 with shareholders in April. This would shift the stock’s price between $1.09 and $5.30, based on yesterday’s value of $0.53/share – and that’s all dependent on if shareholders approve.

If they don’t, plenty of companies trade ‘over the counter’ without affiliation to a major exchange," InvestorPlace editor Jeff Reeves further explained to the site.

"While there’s admittedly less legitimacy or prestige for stocks that trade off the NYSE or Nasdaq in the eyes of some investors here, it’s not an unmanageable situation. In fact, European consumer giant Nestle actually doesn’t affiliate with the NYSE or Nasdaq and chooses to list OTC.”

"Majesco’s biggest problems are that revenue has been pressured in 2013 and the company is running at a significant loss without a lot of wiggle room. Over-the-counter stocks can trade for years and NYSE listed companies can still go bankrupt tomorrow. Sales and profits determine what’s next for Majesco, not the specifics of what exchange it trades on."

Last month, Majesco reported a major decline in revenue for its past fiscal year – with net revenue dropping by $85m compared to 2012.

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