THQ has 50/50 chance of going bankrupt - Hickey
But Farrell "confident" of return to profitability
Analyst Michael Hickey of Janco Partners has said that THQ is in real danger of going bankrupt – comparing the company to troubled publisher Midway.
According to a report by the LA Business Journal, Hickey puts THQ chances of going bankrupt at 50/50.
"You have mediocre product and you’re running out of cash,” said Hickey. “Not the situation they want to be in right now."
Speaking on the possibility of THQ being acquired by a rival publisher, Hickey warned that the company doesn't have a lot of attractive IP as it relies heavily on licensed product from partners such as Disney/Pixar and the WWE.
"You want a strong basket of original properties that are of high quality, that’s what acquirers are looking for. Otherwise you have Midway," said Hickey.
However, CEO Brian Farrell has dismissed talk of acquisition and bankruptcy, telling the paper that its latest cost-cutting plan will return the company to profitability.
"I know that makes for good print and sells newspapers, but those aren’t the kind of things we focus on right now," said Farrell
"When the stock price is depressed, the naysayers can have their day in the sunshine. But we have a plan that we’re very confident will give us cash and return the company to profitability."
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