Official Atari Death Watch Thread

[Retro Rogue]

Thought I'd move the discussion off of this thread and over to a new one all things considering.

 

 

For those who don't know (or have been living under a rock), Atari Inc. was warned on December 21st that for the 30 days previous its market value had been below 15 million (which is a prerequisite for staying listed on Nasdaq). They were given until March 20th to get it back up in value (somewhere in the $1.82 -2.20 price range) for at least 10 consecutive business days.

 

Poorly received winter releases have not helped matters, and even managing to keep their Funmation license (Dragonball Z) has done nothing, and the stock has continued to plummet - reaching $1.05 today.

 

Likewise, an announcement that their only major project on the table was delayed until September, the next Alone In The Dark , has in some people's eyes only been one more final nail in the coffin. Another website reportedly was contacted by an unnamed representative from Atari that its not true and the game will ship on time in March. Though the unconfirmed rebuttal by an unnamed representative is a bit suspect. Likewise is the web site they recently threw up for the game. The most interesting bit of information - nowhere is the previous announced developer/publisher, Atari Inc., found. Instead, the game's site and discussion forum is run by Infogrames' Atari Europe, a division of Infogrames. And a whois lookup on the web address registration also confirms this. The fact that it was a European website that was contacted also makes the announcement suspect that it came from anywhere within Atari Inc.

 

Relatedly, Infogrames announced earlier this month it was using recently fully subscribed bonds to relaunch its own publishing operation. Atari Inc.'s restructuring called for transfer of positions and assets to Infogrames, and elimination of all positions not needed for the new role as a simple publisher/distributor. Is the Alone in the dark takeover a sign of this? If AitD is finished and released via Infogrames and simply distributed by Atari Inc. in the US, that does nothing for its stock as well.

 

Which leads us to the next question. With the restructuring of Atari Inc. back in early December, which called for the elimination of all these positions, just who is left there? They were already down to a skeleton crew before that and significantly reduced their office space accordingly. So who's left there now? I've heard tales from AA members of unreachable tech support and other offices there. Is anyone at the helm there? Or is Infogrames waiting for it to die off so it can absorb it back in?

[Retro Rogue]

Well, surprising many, the stock went below a dollar today to .97 cents. After closing at $1.05 the day before, after hours trading and shaky investor confidence had it plunge to an opening price of $1.00.

 

Someone (most likely at Atari) tried to pump up the stock at the last minute, as they usually try, and it closed at $1.18. Of course, after hours trading made it plunge immediately back down to $1.05.

 

Atari tried a bogus move of saying "We're releasing yet another Dragonball Z game" with their press release. The only problem is, that's all it said. Much like saying "The check is in the mail", all the press release did was state how fantastic the franchise is and how they have the next one "in development". Likewise, they don't really have anything to do with it, as with all of the other games in the franchise. They're all developed by Japanese developer, Spike, and Atari Inc. simply shares the publishing rights with Namco/Bandai. That's of course if Atari Inc. is still around for the as yet unnamed 2008 release date.

 

As if the problems weren't bad enough, if Atari's stock stays below $1 for long enough, they'll also be facing an additional delisting warning. To remain on Nasdaq, your stock has to be above the $1 minimum. So they get two problems now for the price of one.

Edited January 17, 2008 by wgungfu

[+Lynxer2007]

Thanks for the updates . Some of their games they released last year I really liked. Bullet Witch, Hot Pixel, Godzilla. Jenga is also pretty fun, too. I hope they get through this. They're my favorite game company and I want to see Alone in the Dark, DBZ: Burst Limit, and many others see the light of day and make them good profits. I don't care what other people think about them, I'm behind them 100 percent.

Edited January 22, 2008 by EMZayas

[+pboland]

Just thought I would put a link to a new article about Atari. It is an interview with Patrick Leleu. I'm guessing he is in charge at Atari? (what's left of it anyway). Honestly the article feels more like damage control for their image more than anything. You know the typical, "we know what we have to do" or "we are going to re-focus on what we do best" type stuff.

 

Atari boss reveals turnaround plans

 

At this point I don't know what to hope for. Do I want Atari to survive in their image? or Do I want Atari to go down in flames so it can be bought by someone else who can make it rise like a phoenix? Either way it will be interesting to watch.

[carmel_andrews]

Since you are the 'fount of all knowledge' Wgungfu (on things Atari) We'll give you the responsibility of administering 'The Last Rights' (prior to death) ....Please give ATARI a proper viking burial (so that it and it's spirit can't come back from the grave)

Edited January 17, 2008 by carmel_andrews

[Emehr]

Atari died a long time ago. This site, the homebrewers, and Curt Vendel's efforts* are what's keeping the Atari spirit alive. Atari, the company, is just some other company with the Atari label temporarily affixed...and it's severely showing signs of Actiplaque.

 

 

[Edit: *gotta add the countless other sites celebrating the Atari of yesteryear]

Edited January 17, 2008 by Emehr

[Retro Rogue]

Well, the stock keeps dipping lower. Hit a new low of 86 cents today.

 

Infogrames (and BlueBay) head, Patrick Leleu finally admitted to Alone In The Dark being delayed - though they're saying just slightly delayed for a May release. Regardless, its still being done by Infogrames/Atari Europe, not Atari Inc. And even for US distribution rights for Atari Inc., a May date is far to late to help out Atari Inc.

 

A large influx of cash in to Infogrames back in December (which is what Leleu was talking about) hasn't helped anything, and Infogrames' stock slid today as well. He's also talking about doing a reverse stock split for Infogrames. For those not familiar, that's a slight of hand to improve a company's stock position. They cut down the amount of shares, but not the value, and they decide the rate by the amount of shares you want to reduce. Say you have a 100 shares at a current rate of $1 ($100), and they announce a one for 10 reverse split. After the reverse split, you'll have only 10 shares but at $10. You don't loose any money, then gain stock price and maintain their market value. Its supposed to be very rarely done, and is usually sure sign the company is in serious trouble. I.e. Atari Inc. already did that almost exactly a year ago, and bumped its stock from .57 cents to $5.70. It obviously didn't help things in the long run, because as stated, a reverse stock split is a stock market sign that the company is in serious trouble.

 

The funny thing is that while Leleu is promoting AitD in one breath, then says Infogrames is moving to a "family-orientated" in the next.

 

Also telling - "Leleu maintains that Atari/Infogrames will remain independent, provided that "Infogrames becomes profitable, is positioned on promising segments, and the Atari name is promoted." Leleu does state within the interview, however, that if a "good opportunity" arose they would have to look seriously at it."

 

That's saying, providing Infogrames can stand on its own two legs and continue to suck money out of Atari Inc., they'll hold on to it. If not, they're open to offers. No mention if this just means Atari Inc. (formerly GT Interactive), or the Atari properties as a whole (Atari Interactive).

[KrazyKaiju]

Just out of curiosity, how many shares would each AtariAge member have to buy for us to get control of the company?

[thomasholzer]

Infogrames been going strong since 1983, that is almost as long a EA.

I still have the flyer showing their first game (an Ultima-style RGP) from inside ZZAP!64.

They are one of the last independent Euroepean gaming companies. It would be a shame to see them go.

[Retro Rogue]

Just out of curiosity, how many shares would each AtariAge member have to buy for us to get control of the company?

 

 

Of Atari Inc. or Infogrames? If its Atari Inc., Infogrames has a majority of the stock. And even then, what would be the point? Everything (the Atari name, properties, etc.) is still leased from Infogrames via Atari Interactive. And Atari Inc. owes mass amounts of money to BlueBay (Infogrames' puppet master) and Infogrames. You'd simply have controlling interest in an almost sunk ship that would still have to answer to BlueBay/Infogrames.

[Retro Rogue]

Infogrames been going strong since 1983, that is almost as long a EA.

I still have the flyer showing their first game (an Ultima-style RGP) from inside ZZAP!64.

They are one of the last independent Euroepean gaming companies. It would be a shame to see them go.

 

 

They stopped being independent a long long time ago, culminating in the founder Bruno being given the boot by the board. And as can be seen by their stock, they've been anything but strong since 2000:

 

http://uk.finance.yahoo.com/q/bc?s=IFG.PA&t=my

 

 

And now, Patrick is restructuring them as a publishing only company - just as with Atari Inc.

Edited January 22, 2008 by wgungfu

[thomasholzer]

trouble with Infogrames is...in the past, they ALWAYS bought up the wrong companies: Ocean, Gremlin (UK), Melbourne House, Accolade....all these companies were on the way out in the 90s anyway.

 

I was gonna say about Hasbro, game.com, and Atari, Microprose, that was in early 2000s then. Even so, game.com, why?

Edited January 22, 2008 by thomasholzer

[Retro Rogue]

trouble with Infogrames is...in the past, they ALWAYS bought up the wrong companies: Ocean, Gremlin (UK), Melbourne House, Hasbros game.com, Accolade....all these companies were on the way out in the 90s anyway.

 

 

No argument there. Bruno was warned about that problem during his buying spree in the late 90's/early 2000's.

[+Lynxer2007]

Just wanted to update this by saying that Infogrames has replaced a number of board members at IESA, including chairmen Patrick Leleu.

 

Link is here

Edited February 2, 2008 by EMZayas

[Cybergoth]

trouble with Infogrames is...in the past, they ALWAYS bought up the wrong companies: Ocean, Gremlin (UK), Melbourne House, Hasbros game.com, Accolade....all these companies were on the way out in the 90s anyway.

 

 

No argument there. Bruno was warned about that problem during his buying spree in the late 90's/early 2000's.

 

Wasn't Melbourne House sold to Mastertronic in 1987 already?

[midnight8]

Up to $1.42 today

 

Well, the stock keeps dipping lower. Hit a new low of 86 cents today.

 

Infogrames (and BlueBay) head, Patrick Leleu finally admitted to Alone In The Dark being delayed - though they're saying just slightly delayed for a May release. Regardless, its still being done by Infogrames/Atari Europe, not Atari Inc. And even for US distribution rights for Atari Inc., a May date is far to late to help out Atari Inc.

 

A large influx of cash in to Infogrames back in December (which is what Leleu was talking about) hasn't helped anything, and Infogrames' stock slid today as well. He's also talking about doing a reverse stock split for Infogrames. For those not familiar, that's a slight of hand to improve a company's stock position. They cut down the amount of shares, but not the value, and they decide the rate by the amount of shares you want to reduce. Say you have a 100 shares at a current rate of $1 ($100), and they announce a one for 10 reverse split. After the reverse split, you'll have only 10 shares but at $10. You don't loose any money, then gain stock price and maintain their market value. Its supposed to be very rarely done, and is usually sure sign the company is in serious trouble. I.e. Atari Inc. already did that almost exactly a year ago, and bumped its stock from .57 cents to $5.70. It obviously didn't help things in the long run, because as stated, a reverse stock split is a stock market sign that the company is in serious trouble.

 

The funny thing is that while Leleu is promoting AitD in one breath, then says Infogrames is moving to a "family-orientated" in the next.

 

Also telling - "Leleu maintains that Atari/Infogrames will remain independent, provided that "Infogrames becomes profitable, is positioned on promising segments, and the Atari name is promoted." Leleu does state within the interview, however, that if a "good opportunity" arose they would have to look seriously at it."

 

That's saying, providing Infogrames can stand on its own two legs and continue to suck money out of Atari Inc., they'll hold on to it. If not, they're open to offers. No mention if this just means Atari Inc. (formerly GT Interactive), or the Atari properties as a whole (Atari Interactive).

[Retro Rogue]

Up to $1.42 today

 

 

Which means nothing, they've been hovering in the 1.20 to 1.40 range this past week. Still nowhere where they need to be and certainly not a sign of a stable stock. And its been an extremely low volume (4,854 shares today) so the current price is only based on a handful of trades. That's exactly why it took a 10 cent nosedive yesterday and sat there for most of the day.

 

They announced an "action puzzler" and "my horse and me" today as well, not exactly big income titles. I doubt they'll do any more for the company than Atari Classics Devolved did.

Edited February 5, 2008 by wgungfu

[JamesD]

They are probably counting on 'Alone in the Dark' but if they rush it, it will probably suck.

<edit>

Does anyone else find it odd that the website doesn't have an American flag to click on at the entry and the story is based in the US?

Edited February 6, 2008 by JamesD

[Retro Rogue]

They are probably counting on 'Alone in the Dark' but if they rush it, it will probably suck.

<edit>

Does anyone else find it odd that the website doesn't have an American flag to click on at the entry and the story is based in the US?

 

"They" aren't even doing it. As I had stated above its not an Atari Inc. game, it was taken over by Infogrames and their Atari Europe (no relation to Atari Inc., Atari Europe is literally a division of Infogrames). Atari Inc. isn't counting on anything to do with AitD other than US distribution rights this late spring.

 

Hence the UK flag for the English version of the site instead of a US one.

 

 

 

Oh, and Leleu, the guy with the ridiculous talk on how he was saving Infogrames and Atari Inc. has been cut, as well as a bunch of the other top heads. There's a new head of of Infogrames, by the name of Gerald Gardner. And so far the same old story of "a new brand and online vision".

Edited February 6, 2008 by wgungfu

[+Lynxer2007]

Here's an update from Gamespot.

 

Atari trims sales, halves losses

Troubled publisher posts holiday quarter results, says restructuring fees wiped out what would have been a $3.4 million profit.

By Luke Anderson, Brendan Sinclair, GameSpot UK

Posted Feb 13, 2008 12:08 pm PT

 

It looks like investors may have to go elsewhere to ask the hard questions of Atari, as it has decided not to hold a conference call to discuss its results for the third quarter of the 2008 fiscal year.

 

The company reported $41.1 million in revenue for the quarter ended December 31, 2007, down 13 percent from the same quarter last year where it reported sales of $47.3 million. Subsequently, net loss for the quarter was $300,000, an improvement on the reported $600,000 net loss from the same period last year. Atari also noted that without restructuring charges of $3.7 million, the company would actually have turned a profit of $3.4 million in the quarter.

 

The quarterly report also brought word that Atari has run afoul of one of its creditors, BlueBay High Yield Investments. Atari defaulted on part of its agreement with the investment firm, which is also a majority shareholder in Atari's parent company, Infogrames. The publisher is trying to come to a resolution with BlueBay on the matter, but warns that such an outcome can't be guaranteed.

 

The iconic publisher has suffered a number of blows recently. CEO David Pierce resigned in November after just a year in the post, the publisher is once again in danger of delisting from the NASDAQ market, and the company admitted in an SEC filing that it has "substantial doubt about [its] ability to continue as a going concern."

[Retro Rogue]

Atari also noted that without restructuring charges of $3.7 million, the company would actually have turned a profit of $3.4 million in the quarter.

 

Smoke and mirrors. They are massively in debt, which the small "profit" would have gone to. Just so happens the people they are massively in debt to are also the ones who did spearheaded the reorganization. See below.

 

The quarterly report also brought word that Atari has run afoul of one of its creditors, BlueBay High Yield Investments. Atari defaulted on part of its agreement with the investment firm, which is also a majority shareholder in Atari's parent company, Infogrames. The publisher is trying to come to a resolution with BlueBay on the matter, but warns that such an outcome can't be guaranteed.

 

The iconic publisher has suffered a number of blows recently. CEO David Pierce resigned in November after just a year in the post, the publisher is once again in danger of delisting from the NASDAQ market, and the company admitted in an SEC filing that it has "substantial doubt about [its] ability to continue as a going concern."

 

 

This is the most telling part. BlueBay isn't just "one of its creditors" its the main creditor and also majority owner of Infogrames. The fact its having trouble paying loans to BlueBay is again more smoke and mirrors since BlueBay (via infogrames) is also majority owner of Atari Inc. Its like holding up your two hands in front of you and turning them in to hand puppets negotiating with each other. At the end of the day, they're still actually both your hands. Atari Inc. is in forbearance on its loan and has until March 3rd to deal with it (about 19 days), or BlueBay will start slicing and dicing to get back costs. Again more smoke and mirrors, because in truth what is Atari Inc. actually needed for? Almost all the properties it owned have been sold off, Infogrames owns the name and properties so there's no chance of a loss there, and re-setting up US distribution operations is trivial (why they can even spin off part of the gutted Atari Inc. to do that).

 

Here's the specific section of the SEC report:

 

As of December 31, 2007 and through February 12, 2008, we are in violation of our weekly cash flow covenants. BlueBay our lender has not waived this violation and we have entered into a forbearance agreement which states our lender will not exercise its rights on our facility until the earlier of (i) March 3, 2008, (ii) additional covenant defaults except for the ones existing as the date of this report or (iii) if any action transpires which is viewed to be adverse to the position of the lender (See Note 8 ). Although the above transactions provided cash financing through our fiscal 2008 holiday season, Management continues to seek additional financing and is pursuing other options to meet our working capital cash requirements, but there is no guarantee that we will be able to do so. Historically, we have relied on IESA to provide limited financial support to us, through loans or, in recent years, through purchases of assets. However, IESA has its own financial needs, and its ability to fund its subsidiaries' operations, including ours, is limited. Therefore, there can be no assurance we will ultimately receive any funding from IESA. The uncertainty caused by these above conditions raises substantial doubt about our ability to continue as a going concern.

Edited February 14, 2008 by wgungfu

[vw.fe2o3]

Its like holding up your two hands in front of you and turning them in to hand puppets negotiating with each other. At the end of the day, they're still actually both your hands.

 

Now that's funny!

[Clint Thompson]

I was wondering what was up with the stable prices .... reading the last few posts... only word I can come up with is... ugly.

[Retro Rogue]

And the final blow to Atari Inc.:

 

http://www.gamesindustry.biz/content_page.php?aid=33740

 

Infogrames has promoted Mathias Hautefort to head of global distribution for Atari products in the US, Europe and Asia.

 

 

That means they've moved all distribution regarding the Atari brand to France as well, which means they need Atari Inc. for nothing.

[The MilkMan]

Thought I'd move the discussion off of this thread and over to a new one all things considering.

 

 

For those who don't know (or have been living under a rock), Atari Inc. was warned on December 21st that for the 30 days previous its market value had been below 15 million (which is a prerequisite for staying listed on Nasdaq). They were given until March 20th to get it back up in value (somewhere in the $1.82 -2.20 price range) for at least 10 consecutive business days.

 

Hahaaaha, thats awesome! I live under a rock!