"Maybe THQ should acquire them and fire the management"
Seriously. Any company that suffers a 25% decline in console revenues in a market growing by 25% has some problems. The problem with MWY as a takeover target for THQ is the coin-op business. That's not consistent with most publishers' business models. Maybe someone could buy MWY for $9 per share ($300 net cash), sell the coin-op business to Sega for $100 million, and they'd be left with a company with $250 million in annual sales and nearly $125 million in gross profit, with a net acquisition cost of $200 million (not including tax considerations). If most of the employees were canned (certainly the management), but the distribution and portfolio of licenses were retained, it might make a good investment for a large publisher. THQ might even be able to pull it off, and it could become an accretive deal, assuming it could be achieved. But it's probably best that THQ avoid MWY, since it could cause problems.
Perhaps Sega is a potential acquiror. I wonder if management really understands the game business. Maybe this is why WMS dumped MWY. WMS has done quite well since the spinoff. And what's up with Redstone? If he were smart, he'd be buying THQ, which is much cheaper than MWY.
I still have a very small position in MWY, but I'm reevaluating. We may have a new low coming tomorrow.
Todd |
