Mad Catz published a Press Release today confirming that significant changes have been made to their Board of Directors and Executive positions within the company. Thomas Brown, who had been serving as Chairman of the board and the Board's Audit committee resigned from the Board of Directors last Friday, February 5th. His replacement as chairman was named as John Nyholt, who has been with the company's board since Oct 2013. In addition, Darren Reynolds, resigned as President and CEO and has been replaced by Karen McGinnis, previously the CFO. And while that would be plenty to shake up a company, there were more changes as SVO of Business Affairs, General Counsel also resigned and former VP of Product Development, Andrew Young, was named to the newly created position of Chief Technology Officer.
Now you are probably asking, why should you care? Well, this all occurred ahead of Mad Catz' planned third quarter earnings which are due out today after market close or tomorrow. With the company banking on the return of Rock Band within the quarter, there may be a good chance that the game, along with peripheral sales and DLC content, has not been what was expected. Case in point, DLC has been coming at a regular clip, but the last week of January was skipped, and the recently released list of 10 February artists had six of them announced for this week's DLC. Not saying this is signs that there may be trouble, but there may be some financial issues here with the game. Consider this quote from the press release:
“Looking ahead, we are confident that we have a talented leadership team in place that will enable us to steer the Company on a steady course in its operations and financial performance as we look to grow our business and reward our shareholders.”
That sure makes it seem like the company will not only disappoint on its earnings call, but cause some mild panic. Or it could be something deeper with the way the company was conducting its business practices, I guess we will find out tomorrow when the financials are released. And if it matters to you investors out there, Mad Catz's stock trades on the AMEX and finished the day at $0.29, down 25% ($0.10) because trading was halted prior to the press release announcing the resignations.
