Mad Catz: First Delisted, Now Files for Bankruptcy
Mad Catz (OTCMKTS:MCZAF) have been struggling. In February we covered that they were looking at a way to avoid delisting from the New York Stock Exchange. Needless to say, the primary idea put forward of a reverse stock split failed to instill confidence. The company was delisted from the NYSE on the 23rd of march, transferring to OTC PINK.
Financial woes have followed the company for a long time now. Although the Q4 and fiscal year results haven't been revealed, it was guaranteed that the year would see a loss. Five out of six years would see a net loss, with over $30 million of losses in total. Of course this would roughly be the time when the company looks at their financial year and 2017's could have been considerably worse than expected, even look at the financials at Q3.
According to Reuters, Mad Catz have now voluntarily filed for bankruptcy. The directors and officers of the company resigned yesterday, following creditors indicating credit levels wouldn't be raised beyond current levels.
Mad Catz and the fall of Peripherals and Accessories
Mad Catz have suffered from two core problems. In our previous post we covered the costly venture that was Rock Band 4. Alone it caused over $12.5 million in losses. When last highlighted, $2.5m of the company's assets were in Rock Band 4 stock which would, by all accounts, sell for considerably less than that. The problem comes from the fact that losses here were compounded, not mitigated by the company's core sector.
Peripherals and Accessories aren't selling as well as they did. This is a global trend too. Figures from the UK highlighted a 16.6% reduction in sales in that sector. Recent figures from GameStop highlighted a 3.75% decrease in sales. These falls in sales extend to beyond peripherals and accessories, but for the case of Mad Catz who expressly fall into that sector then it's a damaging trend.
It's a shame for any company to fall to such a fate, but it should hopefully offer a warning to others that haven't diversified. Of course Mad Catz attempted to, but went for riskier ventures like Rock Band 4 and the M.O.J.O micro console which lowered from the initial price of £220/$250 to just £120/$150 within a year and a half.
Pricewaterhousecoopers inc have been appointed as trustee to manage the assets of the company during the bankruptcy.
Stay in the loop
GET A DAILY DIGEST OF LATEST TECHNOLOGY NEWS
Straight to your inbox
Subscribe to our newsletter