Majesco stock plummets as CEO quits
Publisher's shares battered in after-hours trading following executive exit and lowered earnings expectations.
Shares of Majesco ended the day Tuesday up slightly to $6.89. But that didn't last. The company's stock plummeted in after-hours trading, falling more than 50 percent to $3.41 on news that the company had sharply downgraded its financial outlook for the year and that its chairman and CEO, Carl Yankowski, was resigning effective immediately.
Yankowski joined the company only last August. He resigned "under a mutual agreement with the company," read a corporate statement.
While the CEO position remains unfilled for now, Majesco's board of directors named current board member Jim Halpin as acting chairman of the board.
Majesco had previously projected annual net revenue of between $175 and $185 million and operating income, or profit, of $16 to $18 million. Revised expectations now peg net revenue for its 2005 fiscal year to be between $120 million and $125 million, with an operating loss of $16 to $19 million. Majesco's 2005 fiscal year ends on October 31.
The company cited several causes for the lowered guidance. It said the primary reason for losses was weak summer sales. Specifically, Psychonauts and Advent Rising have recently been singled out as being the highest-profile retail disappointments.
Another factor Majesco mentioned was "the movement of one of its key movie-based video game titles out of the fiscal year in order to better coincide with the related theatrical release." While the game was not named, Majesco recently acquired the game rights to the big-screen version of Aeon Flux, which stars Charlize Theron. The sci-fi thriller is still tentatively scheduled for release this fall, meaning the video game iteration would likely be released during Majesco's 2006 fiscal year.
At press time, after-hours trading volume was heavy, as the 604,250 shares traded after hours were nearly equal to today's regular trading session volume of 901,051.