Pachter: THQ Unlikely to Return to Profitability Unless Revenues Begin to Grow

November 6, 2012 by Alex Co

Wedbush Morgan’s Michael Pachter expects THQ to raise financing that could lead to dilution of existing shareholdes…if not, bankruptcy is another possibility.

THQ has not been having a good year so far; it cleared off a few promising games off its slate to cut back on costs and they still don't have a "big" franchise that could pull them out of their slump. And to make matters worse, their recent financial earnings report aren't too hot, either.

Wedbush Morgan analyst and industry figure Michael Pachter iin a note to investors states, "Should its financial position continue to deteriorate, we expect THQ to raise financing through an equity sale that could lead to dilution of existing shareholders…We expect creditors to be asked to renegotiate terms at a discount; if they are unwilling, bankruptcy is possible."

He also adds that THQ is unlikely to return to profitability unless its revenues once again begin to grow; which is easier said than done at this point. I mean, what IP or franchise does THQ hold that can net them some solid cash in a short amount of time? WWE games? I honestly do not know at this time.

So does this mean THQ will file for bankruptcy soon? Well, if things continue the way they are, I doubt anyone would be surprised if they did, no?

Source: GamesIndustry