Midway (mostly) Sold for $100K
Midway Games Reports 2Q Earnings
And the hits just keep on coming for Midway. Early this morning, Sumner Redstone, the controlling owner of Midway Games Inc with 87% of the shares, sold every last one of them. A sole private investor known only as "Mark Thomas" purchased the 87% share of the company for a paltry $100,000. This equates to .12 cents a share, or a measely .3% of the morning's starting price at the already low 38 cents. For Redstone, this is a loss on top of a loss, as the 38 cents a share already showed a significant loss on his investment.Mark Thomas doesn't just get the beleaguered company, however. According to the Wall Street Journal, he also assumes $70 million of "senior secured and unsecured debt." Some of that is backed by banks, some will be his personal debt to pay based on the future success or failure of the company. While many have noted this Mark Thomas seemingly came out of nowhere, with no discernible ties to any video game company let alone Midway, he must have a plan. The stock only dropped 5 cents on the day to 33 cents, maintaining the "deal" for Thomas. The company's major release, Mortal Kombat vs DCUniverse, comes in a very crowded holiday release season. It saw a respectable 245,000 copies sold in its first week and favorable reviews from critics. Whether or not it becomes a major seller for the remaining month of the holiday retail season remains to be seen.
In the midst of other financial woes for the company, those within still look to the future. Last week, Midway began hyping a top secret game they say will push the graphical limit on the current generation of consoles. They also signed a deal with in-game Ad company Double Fusion to find a new monetization option today. Meanwhile, elsewhere in the games world, there are fresh rumors of EA Games and Ubisoft both courting Eidos Interactive (Tomb Raider) parent company SCi for a takeover. One possibility for Mark Thomas has him going the opposite direction and shopping Midway to some of these larger conglomerates. No matter what the future holds, the sale today is clearly bad news for Sumner Redstone, but could actually be great for Midway Games and their new majority shareholder, Mark Thomas.