Company stands accused of concealing poor sales projections
THQ‘s new restructuring plan has hit another roadblock as three different firms have filed class action lawsuits over the uDraw tablet against the already limping company.
The suits claims THQ made “false and misleading statements” when pitching investors on its uDraw gaming peripheral, saying that THQ did not fully disclose many specific facts about the device beforehand to investors.
The legal jargon basically translates that THQ are accused of not sufficiently warning investors about the terrible sales of its uDraw tablet in advance, and that the company should not have pitched its device as being successful when it failed so horribly upon release.
Their reasoning for such claims; THQ, through financial analysis, could have foreseen this failure if they devoted the necessary resources to such a task.
The legal system has recently been friendly towards the gaming industry, clearing EA of false advertising claims over Mass Effect 3, though the EA suit was filed by the Better Business Bureau, not private lawfirms.
THQ’s stock prices have been sinking fast, forcing the company to approve a reverse-split for June 29. For those unfamiliar with business terms, a reverse-split effectively halves the total number of company shares and doubles the stock price.
The company needs this reverse-split to keep their stock prices above the $1 per share minimum required to reinstate their Nasdaq listing.