Some accounts state that videogames are one of the very few recession-proof industries. It appears that Midway Games will be testing that adage to the extreme though – on Thursday, the company reported that it had received a warning from the New York Stock Exchange that it may be delisted, due to its low share price.
According to the Chicago Tribune: The Chicago-based company said it received a notice from the NYSE Nov. 14 that it was no longer meeting the exchange's requirement that a stock's minimum average closing price be $1 per share over 30 consecutive trading days. Midway's shares have been trading below $1 since late October and last closed at 25 cents. The company, whose majority shareholder is media mogul Sumner Redstone, has been hurt badly by game delays, weak sales and liquidity problems.
Midway has six months to meet the NYSE's standards, and this period could be extended. The shares will remain listed and trade during this time.
The company has been in alarming financial straits for some time, and reported a third quarter loss of over $75 million. The company has said that it is working to address several critical issues within the company, while insiders point to the bulk of the company’s future riding on this month’s Mortal Kombat versus DC Universe, a return to and a reinvigoration of Midway’s Mortal Kombat license. The company is also betting heavily on the success of Wheelman, a videogame starring Vin Diesel, due for release on February 16th, 2009.