Majesco on ropes, investor threatens hostile takeover
by Vladimir Cole 
{ Sep 30th 2005 at 5:00PM }
According to a letter from a hedge fund investor to Majesco Entertainment (Psychonauts, BloodRayne 2, Advent Rising, Raze's Hell), Majesco is in danger of going bankrupt and must "take decisive and aggressive action to begin to deal with the enormity of problems that now face the company."
The hedge fund, of course, is interested in making that cash infusion by purchasing some 3.3 million shares of Majesco. This would give the fund more control over the management of Majesco, presumably allowing them to make the changes that they deem necessary to return the company to profitability. If Majesco doesn't accept this "generous proposal," the hedge fund has vowed to make a hostile takeover, resulting in sure curtailment of the careers of some Majesco execs.
Though we might scoff at the idea of a finance geeks running a games company, it would be hard for Majesco's new management to run the company any more disastrously than it has been run of late. Majesco stock is near a 52-week low (see chart to at the top of this post) after a string of mistakes.
Reader Comments (Page 1 of 1)
Rocketboy @ Dec 18th 2005 9:07PM
I always wondered how a third-tier player suddenly became one of the top gaming companies overnight...
[Jesse] @ Dec 18th 2005 9:07PM
Wow, that's a misleading graph if I ever saw one...
crummy @ Dec 18th 2005 9:07PM
I cry when I see Psychonauts publisher heading this way :(
vc @ Dec 18th 2005 9:07PM
That graph is straight from Yahoo finance. I think you're objecting to the fact that the vertical distance between 0 and 5 is greater than the distance between 15 and 20. Yahoo Finance does this on pretty much every graph.
dave @ Dec 18th 2005 9:07PM
it's called a logarithmic scale. there's nothing misleading about it. log scales are used to allow large changes in magnitude (such as majesco's stock price collapse from around 20 to around 6) to be shown along with smaller ones (such as their fall from around five dollars to the land of "oh noes the hedge funds are attacking" land).
sheesh, step away from the xbox and take a math class or two.
darkintragedy @ Dec 18th 2005 9:07PM
I think this is partly due to the longgggg delay of BR 2. I mean shortly after the successful BR 1, they made many loyal fans. I visited the forums frequently, where the modelers and programmers often post and the deadline has been pushed back and back constantly. By doing this, they lost some customers (I'm one of them). Hopefulle they can gain some profits with Aeon Flux, as they are working on that for the movie.
Josh Farkas | Water Media @ Dec 18th 2005 9:07PM
This is very sad news.
Psychnauts was the best platformer I've ever played. The creativity infused into every little aspect was a joy, but how it applied to gameplay was MAGIC. Majesco did us all a service by picking up this title. And Raze's Hell wasn't too bad for $20 either.
All in all I think this just reflects why the industry is awash in sequels - No one buys anything else.
Joey @ Dec 18th 2005 9:07PM
Take it from one that has been part of the Majesco family for several years - we saw this coming a long time ago. Majesco has shown no fiscal responsibility or ability to have effective management. They continue to make the same mistakes over and over again with those in decision making positions having no accountability for their ineptitude. A hedge fund taking some control and installing professional executives with a solid understanding of the development process would be a breath of fresh air. Perhaps with someone at the helm that understands the importance of market research and how to create a product that appeals to the mass market they will have a better chance of future success.