A trick prevents Majesco stock from being delisted

Reverse split saves Cooking Mama publisher’s bacon

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.