Game industry watchers looking for news about Infinium Labs, the South Florida-based manufacturer of the infamous Phantom PC game console, had plenty of options to choose from over the weekend.
First, an article in the Florida-based Sarasota Herald-Tribune revealed a large dividend awarded to several Infinium executives earlier this month. The article reported that Infinium Labs had "dished out a stealthy stock dividend to insiders as soon as it became a publicly traded company, and without bothering to tell the stock-trading public through traditional channels."
According to the Herald-Tribune, on January 7 Infinium took over an existing public company (Global Business Resources) in order to quickly become a publicly traded company, a common tactic. One week later, a notice appeared on the OTC (over-the-counter) Bulletin Board Web site indicating that current stockholders would receive a 5-1 stock split. According to the Herald-Tribune, the decision to issue the stock split had been made on January 8, the day after the takeover, and had only been disclosed via a one-page letter sent to NASDAQ by the Rochester, New York, law firm Nixon Peabody, counsel for the Phantom-maker.
According to a subsequent SEC filing, "two founders of Old Infinium, Timothy M. Roberts and Robert Shambro, became entitled to receive shares representing 39.54% and 17.16% of the outstanding Common Stock" as a result of the split, which boosted the total shares from 4,577,761 shares to 22,788,805. The new, diluted Infinium stock is currently trading off-board for approximately $8.50. In layman's terms, that means that as a result of a split disclosed only by one letter to NASDAQ, Roberts and Shambro currently own $76,590,894 and $33,239,750 in Infinium stock, respectively.
The Herald-Tribune secured the opinion of a local securities attorney who said Infinium's "method of disclosure was insufficient." However, a source close to the company told GameSpot that "what the paper reported on is absolutely a legitimate transaction." Another source told GameSpot that Infinium Labs vice president of communications Jim Roberts had done a "horrible job of communicating with the local paper." But in a conversation with GameSpot today, Roberts blasted the article, calling it "misleading and inaccurate in slant and content."
The Herald-Tribune piece was also the first to reveal that Infinium had hired former DirectX star and Xbox strategist Kevin Bachus. The company is announcing a new president and chief operating officer tomorrow, and it seems almost certain that it will be Bachus, who was a key player in the Xbox's product launch. GameSpot spoke with Bachus today, but he declined to address the upcoming announcement. "I'll talk to you tomorrow," he said. However, if Bachus is named president and COO, the upstart manufacturer will have an experienced hand to guide the Phantom's launch in an extremely competitive marketplace.
In other Infinium news, the company announced today that it has acquired $15 million in financing from venture capital firm SBI Brightline VI. Roberts also confirmed that Infinium had contracted with Los Angeles-based PR agency Bender/Helper Impact, whose past and present clients include Konami, Namco, Sammy Studios, Electronic Arts, and Midway Games. The move was done, according to Roberts, to enable Infinium "to become consistent in our media relations."