THQ could face sale or bankruptcy following poor financials, predicts Pachter

THQ published its most recent financial report last night, and the results made for grim reading. The publisher has now hired an accountancy firm to seek "strategic and financing alternatives", but Wedbush analyst Michael Pachter isn't convinced the move will be enough to avoid sale or bankruptcy.

VG247 reported on THQ's financial report, along with the news that release dates for South Park, Metro: Last Light and Company of Heroes 2 had all been pushed back. South Park is the biggest hit, now pushed back to 'fiscal year 2014'.

On the matter, THQ president Jason Rubin stated, "I firmly believe releasing our fourth quarter titles without extra time for polish in the current environment would lead to underperformance that could in turn lead to future additional capital shortfalls."

"But extending development schedules in order to make the best possible titles also has financial implications," he added, "Yet there can be no doubt which path has the greatest chance of leading to the long-term success of the company. We must follow the course that generates the highest quality games, and will establish THQ as a mark of quality for the consumer.”

Now, GI.biz reports that THQ has now hired Centreview Partners to seek a solution to the poor financial state of the company, equating to losses of $21 million.

On Centreview's hiring, a THQ statement explained that the accountants would "assist the company in evaluating strategic and financing alternatives intended to improve THQ's overall liquidity, including raising additional capital, preserve the company's ability to bring the best possible games to market during the most advantageous release windows and to help address the $100 million 5% convertible senior notes due August 2014."

Wedbush Morgan analyst Michael Pachter has now thrown his hat in the ring, stating in a ote to investors, "Should its financial position continue to deteriorate, we expect THQ to raise financing through an equity sale that could lead to dilution of existing shareholders We expect creditors to be asked to renegotiate terms at a discount; if they are unwilling, bankruptcy is possible."

Pachter added, "Although THQ has been able to lower its cost structure through layoffs and a streamlined release slate in order to temporarily improve profitability, it is unlikely to return to profitability unless its revenues once again begin to grow."

What's your take on THQ's situation? Was its slate of software up to scratch or could more have been done to help avoid losses? Let us know below.