THQ has dodged a bullet, keeping its NASDAQ stock market listing due to board approval of a reverse stock split. The Board of Directors agreed last week to a 1-for-10 stock split, which essentially converts every 10 shares of stock into one share of stock. This reduces the total number of shares from 68.5 million to roughly 6.9 million.
This essentially means that each remaining piece of stock gains 10 times its value. Shares had been trading under $1, which led to a delisting notice. The company had to achieve more than $1 per share for 10 consecutive business days, and this move should go a long way towards that.
The company isn't totally out of the woods yet. This will make it much easier for the company to maintain trading at above $1 a share, but it has to achieve that 10-day target. But a 1:10 ratio is the largest one the Board could have approved, given its other choices of 1:3 and 1:5. This gives the company the best chance.