With licences sold and series pulling out of agreements, the last few weeks have not been positive for one game developer. But now, Motorsport Games is looking at a potential NASDAQ Stock Market delisting.
Recent years have seen a lot of turmoil in the Motorsport Games offices. But the last couple of weeks have been especially worrying for those within the company. Following far from positive financial reviews, the organisation cut its workforce by almost half and sold the NASCAR licence earlier this month in an effort to save the company.
Meanwhile, both the BTCC and Indycar have put an early end to their licence agreements due to terms not being met. The month of November 2023 will clearly leave a sour taste in the mouths of those in charge. But it seems the troubles are not over.
This morning, Twitter user JPet27 has uncovered a Notice of Delisting sent to the company by NASDAQ. This is the third time in a year and a half that Motorsport Games has received a delisting warning. So it has precedence of overcoming them. But with less cash flow, a rapidly shrinking workforce and fewer projects, the situation is far more critical. Here is all you need to know about the matter.
Motorsport Games Notice of Delisting
It seems NASDAQ sent the letter warning MSG of delisting on 17 November following the previous Quarterly Report. In fact, the minimum value of all company stocks on a NASDAQ listing must add up to over $2.5 million. In its most recent Quarterly Report, Motorsport Games’ total equity was just $498,897.
As part of the notice’s requirements, Motorsport Games has until 2 January to provide NASDAQ with a plan to amend the issue. This does not require MSG to gain $2 million in equity by the New Year. But lining out a conclusive plan is not an easy matter.
With the sale and cancelling of the majority of the developer’s major licences, Motorsport Games cannot rest on their value. Positively for the company, Le Mans Ultimate recently got a release date for early 2024. So the title’s release will most definitely form a major part of its equity plan.
All-in-all, the company has just over a month to provide its plan to rebuild equity. If accepted by NASDAQ, Motorsport games will get a further 20 weeks to reach the minimum equity. If it cannot meet the requirements, there is a high chance Motorsport Games will be delisted from the NASDAQ stock market.
In most cases, a delisting results in plummeting stock value. Whilst shareholders will not lose their stocks, it will be more difficult to sell them off. Further loss of value, according to most financial experts is a route towards bankruptcy. With many sim racers still looking forward to Le Mans Ultimate and Studio 397 continuing work on rFactor 2, they are likely hoping for a positive end for both projects, however.
Are you still excited for Le Mans Ultimate? Tell us on Twitter at @OverTake_gg or in the comments down below!