Majesco is no longer in danger of being delisted from the NASDAQ stock exchange, thanks to some clever accounting. The Cooking Mama and Zumba Fitness publisher pulled off a reverse stock split last month, reducing its outstanding shares by a factor of seven.
NASDAQ requires companies to maintain a minimum bid price of $1 per share, a threshold Majesco fell below in January 2013. After a couple lengthy grace periods, Majesco finally managed to get its head above water, closing trading this week at $2.42.
Though individual shares may be selling at a higher price, reverse splits do not create value for investors. A book of Majesco shares is still worth the same amount; there's just less individual units to go around. This type of move really only delays the inevitable, affording a struggling business time to try digging itself out of a hole.
Majesco is presently betting the farm on a new online casino business and its indie publishing label Midnight City, distributors of Costume Quest 2, BloodRayne Betrayal, and High Strangeness.
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