Midway sold for $100,000.

[nintenho]

Yes five zeros.

http://www.eurogamer.net/article.php?article_id=322379

Sumner Redstone has sold his controlling stake of Midway Games for a paltry USD 100,000 (GBP 66,718 / EUR 79,241), or just USD 0.0012 per share.

That 87 per cent will be bought by private investor Mark Thomas, in a deal the Wall Street Journal said will be officially announced today, according to Media Memo.

That same stake was apparently worth around USD 30 million on Friday, and Thomas will also assume Midway's chunky USD 70 million in debt as part of the deal.

Redstone was said to have sold Midway Games to ease his company's - National Amusements' - whopping USD 1.6 billion in debt. Half of that has to be paid back by the end of 2008, apparently, which is just 30 days away.

Midway Games has had a tough year, cancelling unannounced projects, laying off staff and facing the constant threat of delisting from the New York Stock Exchange.

The videogame company will look to Mortal Kombat vs. DC Universe to ease many of its troubles, although critics appear to have been less than bowled over so far.

My first guess was that Thomas wanted to sell off all of the old Midway's IP's for whatever he could get but I don't think that those are worth $70 million. The only major IP that Midway has right now is Mortal Kombat but not a lot of companies are make fighting games anymore.

It is possible that he plans to sell all of Midway and it's IP's to a large publisher but that sounds even riskier. I think it's most likely that he wants to overhaul the company and make it a fixer-upper.

Will be interesting to see what happens to Midway.

 

[AntShaw]

They should of just given him the debt if he wanted to take on that burden. This move doesn't make much sense. I think some of these old cats are a little sentimental with old names.

I just can't fathom why he would take this on, unless he was going to pawn it off on someone else ASAP. Hasn't Midway been de-listed as well?

 

[tongue_of_colicab]

What I heard of it he's likely to be going to sell the company in bits hoping that all together earns him more than that 100k.

 

[ShaidarHaran]

What I heard of it he's likely to be going to sell the company in bits hoping that all together earns him more than that 100k.

So how is he going to pay off the 70 million in debt he acquired along with the company?

IOW: no

 

[AntShaw]

What I heard of it he's likely to be going to sell the company in bits hoping that all together earns him more than that 100k.

He will need to be a pretty good snakeoil salesman to pull that off. There is a reason Midway isn't profitable. As we discussed there are really no IP's worth buying.

With the 70 mil debt to boot. I'm curious where all the specific debt is tied up into.

 

[sebbbi]

It's interesting to see if the ghost racing patents Midway owns have anything to do with this move... Many developers have been paying them royalties to use ghost racing in their driving games.

 

[AntShaw]

I stand corrected, they have 30 more days to reach $1 before they get delisted. It's all over for Midway.

For those curious, quick listing of some IP's:

Unreal Tournament 3; Stranglehold; Rampage: Total Destruction; Happy Feet; Mortal Kombat: Armageddon; Blitz: The League; Mortal Kombat: Shaolin Monks; Mortal Kombat: Deception; NBA Ballers; Midway Arcade Treasures and Mortal Kombat: Deadly Alliance.

 

[fearsomepirate]

I'm pretty sure that Unreal Tournament is an Epic-owned IP. The Mortal Kombat IP could conceivably be resuscitated, but the only way any of their IPs is worth anything is through something like Virtual Console.

 

[obonicus]

Isn't NBA Jam a Midway IP?

 

[JPT]

But if the investor got a company that is in the black, which he uses to acquire Midway, can that company not write of the debt, ie reduce its tax?

 

[Cheezdoodles]

But if the investor got a company that is in the black, which he uses to acquire Midway, can that company not write of the debt, ie reduce its tax?

A company cannot write off debt it owes. Only Bondholders (in most cases banks or other financial instututions) can write off debt.

The company owes this money to the bank, they are obliged to pay, if not, the bank will make them go bankrupt. They cannot just write off debt, only the bondholders can do that (the owners of the debt, in most cases, the bank).

Debt can however be used to reduce a companys tax payment, since interest payments give tax benefits (or in some countries, are counted before you pay taxes, thus end result will be worse = less tax)

 

[BoardBonobo]

Aren't banks just companies too? And has been recently proven banks can go bankrupt as well. Besides MS will probably buy it up they haven't innovated for ages... lol.

 

[Cheezdoodles]

Aren't banks just companies too? And has been recently proven banks can go bankrupt as well. Besides MS will probably buy it up they haven't innovated for ages... lol.

Yes, banks are companies aswell.

Point here is that a company cannot simply write off its debt. Its not theirs to write off. They are obligated to pay the bondholders.

Similarly, Banks cannot write of their debt either (Because thats money they owe to somebody), but they can write off their assets, and those assets can be money that is lend to f. example a company.

 

[BoardBonobo]

The mercantile ascent of the banking industry is well documented. Set up by thieves to launder money for corrupt merchants in Florence. Just to avoid tax. Now there's irony... And bonds are only worth the paper they're printed on (or cotton if you're in the south . Argh it's inflation...

Anyway, in terms of the current market situation, who holds the bonds doesn't matter, everything can be guaranteed by futures. And in this case those IPs are pretty good futures.

 

[fearsomepirate]

Anyway, in terms of the current market situation, who holds the bonds doesn't matter, everything can be guaranteed by federal bailouts and printing money

Where's the video game industry's bailout?

 

[DeadlyNinja]

Hey, how about we all chip in money here at Beyond3d and buy Midway! It shouldn't be hard to raise 100K.

 

[obonicus]

Isn't there a poster or two who are/were Midway employees? Any insight on what's going on there?

 

[fearsomepirate]

Yeah, if would have rather worked on Hitler II stomping around the sun on a T-Rex, that says something.

 

[DeadlyNinja]

Yeah, if would have rather worked on Hitler II stomping around the sun on a T-Rex, that says something.

I'm sold. When's this game coming out?

 

[Cheezdoodles]

And bonds are only worth the paper they're printed on (or cotton if you're in the south . Argh it's inflation...

Bonds can be worth alot, all depending on who you lend money to\buy bonds from. Even in this market situation. I dunno what your on about..

Anyway, in terms of the current market situation, who holds the bonds doesn't matter, everything can be guaranteed by futures.

Bonds can be looked at as futures (well, options actually, since you can default, wheras with future contracts you are obliged to pay)

Who holds the bond is definately revelvant to the earlier discussion, as only the bondholder can write off the debt. But then again it seems like your post was more of a rant based on some wierd perception of finance, rather than trying to come with anything insightful.

And in this case those IPs are pretty good futures.

Lol. "good futures"? Why are a couple of medicore outdated IP's supposedly good futures?

Hey, how about we all chip in money here at Beyond3d and buy Midway! It shouldn't be hard to raise 100K.

Why would you want to buy something like Midway? Its heavily in debt, high risk, and not enough potential return to justify it.
Well i guess we could hype the company up and then maybe manage to sell it for a decent profit.

But there are better and easier ways of making money. Right now a strattle strategy on a index is allmost guaranteed to earn you money.