Video game developer THQ (NASDAQ:
) has announced that it has filed for bankruptcy. The company has
secured an asset purchase agreement with Clearlake Capital Group
"to acquire substantially all of the assets of THQ's operating
business, including THQ's four owned studios and games in
development." THQ, which produces the Saints Row franchise,
reportedly owes more than $100 million to creditors.
When the company announced that it would sell Saints Row: The
Third and other games via the charity website HumbleBundle.com,
many wondered if this was a desperate attempt to earn money.
Others speculated that it was a marketing gimmick. Based on
today's developments, it seems that the first prediction may have
"The sale and filing are necessary next steps to complete
THQ's transformation and position the company for the future, as
we remain confident in our existing pipeline of games, the
strength of our studios and THQ's deep bench of talent," Brian
Farrell, Chairman and CEO of THQ, said in a
. "We are grateful to our outstanding team of employees, partners
and suppliers who have worked with us through this transition. We
are pleased to have attracted a strong financial partner for our
business, and we hope to complete the sale swiftly to make the
process as seamless as possible."
THQ has been struggling to stay afloat this year and the last,
losing more than 97 percent of its value since December 20, 2012.
In March 2011, Wedbush Securities analyst Michael Pachter
spoke to Benzinga
about one of the more significant sell-offs to hit THQ.
"I think that THQ's share decline in excess of the overall
market decline was caused solely by mediocre reviews for
Homefront," said Pachter. "The game is the most expensive one
produced in THQ's history, had the greatest pre-launch marketing
budget in company history, and was widely viewed as the
centerpiece in the company's core games strategy."
THQ showed signs of hope in October 2011 when it climbed
roughly 15 percent. Those gains were reversed in the following
month, however, as THQ plunged another 18 percent.
The firm had another recovery in April 2012, rising 25
percent. Those gains were short-lived, however. THQ plummeted
more than 14 percent in May and dropped another four percent in
June. In July, THQ lost more than 12 percent of its value,
followed by a four percent drop in August and a 22 percent drop
in September. In October, THQ declined by 20 percent. Last month
THQ shed another 49 percent of its value.
Despite the filing and asset sale, THQ management said that
the company does not anticipate any layoffs. Production on the
fourth Saints Row game is expected to proceed.
(c) 2012 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.