Motorsport Games Entire Board Of Directors Have Resigned

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The Motorsport Games Odyssey keeps on continuing. And it keeps on getting weirder. In the latest stroke of madness, the entire board of directors resigned due to a "proposal to raise additional capital".

As if the story of Motorsport Games couldn't get any more complicated and convoluted, today's news seems to top everything off.

As the American company tries to find a way to raise more capital, its parent company Motorsport Network seems to have made such an outrageous proposal that the entire board of directors have resigned.

But first, a little lesson in company structure and stocks:

What is a Board of Directors?​

A board of directors (B of D) is the governing body of a company, elected by shareholders in the case of public companies to set strategy and oversee management. The board typically meets at regular intervals. Every public company must have a board of directors. - Investopedia
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So a few key facts are:
  • The board of directors of a public company is elected by shareholders.
  • The board makes key decisions on issues such as mergers and dividends, hires senior managers, and sets their pay.
  • Board of directors candidates can be nominated by the company's nominations committee or by outsiders seeking change.
  • The New York Stock Exchange and the Nasdaq require listed companies to have a majority of outside, or independent, directors on their board.
Now the last of these points might prove troublesome for the company yet, as the current Board of Directors, which seems to be made up of 1 person appointed by Motorsport Network, is no longer NASDAQ compliant.

This means that, should no solution be found in the near future, Motorsport Games could be delisted from NASDAQ.

Why being delisted is bad.​

If a company has been delisted, it is no longer trading on a major exchange, but the stockholders are not stripped of their status as owners. The stock still exists, and they still own the shares; however, delisting often results in a significant or total devaluing of a company's share value.

Therefore, although a shareholder's ownership of a company does not decrease after a company is delisted, that ownership may become worth much less, or, in some cases, it may lose its entire value.

As a shareholder, you should seriously revisit your investment decision in a company that has become delisted. In many cases, it may be better to cut your losses. A firm unable to meet the listing requirements of the exchange upon which it is traded is quite obviously not in a great position. - Investopedia
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So, basically, if a company is delisted from NASDAQ, the stock value tends to drop dramatically. Meaning some investors or shareholders might think sooner rather than later to "get off the sinking ship".

So to keep a TL;DR of everything: This is pretty bad.

After saving themselves from delisting with a 1-to-10 stock split, they are now at risk again.

At this point, what do you think of this odyssey that Motorsport Games is going through? Is the company saveable? And how do you think will rFactor 2 be affected? Let us know in the comments down below!
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About author
Julian Strasser
Julian Strasser
Motorsports and Maker-stuff enthusiast. Part time jack-of-all-trades. Owner of tracc.eu, a sim racing-related service provider and its racing community.

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T
Ole Marius Myrvold said:
Isn't that due to them not being allowed to release their Not-IndyCar-IndyCar?
A bit like the issues they had with the non-F1, F1 cars in AMS1?
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Not quite. They could have released the not modern IndyCar-InyCar, but chose not to in good faith with IndyCar that they would negotiate a deal. They are still not releasing it as they are continuing negotiations. That is what Renato stated in the latest update. There is nothing preventing them from releasing it, but Renato prefers getting the actual license if it is possible and he says that door hasn't closed yet.
 
DB_1973
Premium
passenger said:
Let's cross fingers and hope this doesn't affect at all rFactor 2 and its present
and future development.
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Sadly S397 was acquired by MSG. So if it goes belly up, I would imagine so would S397. Not to say someone could not purchase the rf2 engine or S397 in a bankruptcy.
 
T
Ole Marius Myrvold said:
I wish I shared your optimism. I see no reason why WEC suddenly will get their game now, when they didn't back when WEC was a lot more popular.
No Indy/IMSA game either.

Personally I want a proper WEC-game, IndyCar-game, NASCAR-game and BTCC-game. Not just cars included in other games to drive :/
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I couldn't agree more. Racing sims have become too a-la-cart for my liking. The ability to go from a sportscar to an open wheel car only holds it's appeal to me for so long. I want official immersive experiences. I want a series entire grid represented. I thought ACC was close, but their lack of on track immersion, lack of FCY, lack of any actual atmosphere for races or career mode really deflated the experience to me.

I would love for an IMSA game with the feeder series incorporated to allow for a career progression if you want or the ability to just run the top Weathertech series with the entire grid of cars and drivers. Same goes for WEC and other series as well. It seems we are basically at a point where you either get a good driving experience with little immersion outside of that or you get something like the F1 game where the driving experience is subpar, but the other features of the game are much more immersive than any sim.
 
M
Tar Heel said:
I couldn't agree more. Racing sims have become too a-la-cart for my liking. The ability to go from a sportscar to an open wheel car only holds it's appeal to me for so long. I want official immersive experiences. I want a series entire grid represented. I thought ACC was close, but their lack of on track immersion, lack of FCY, lack of any actual atmosphere for races or career mode really deflated the experience to me.

I would love for an IMSA game with the feeder series incorporated to allow for a career progression if you want or the ability to just run the top Weathertech series with the entire grid of cars and drivers. Same goes for WEC and other series as well. It seems we are basically at a point where you either get a good driving experience with little immersion outside of that or you get something like the F1 game where the driving experience is subpar, but the other features of the game are much more immersive than any sim.
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The problem is in the financial side of it: to have a full scale simulator with all those details fully dedicated to a series costs a fortune and requires long years. The revenues aren't there to make it fly unless you are backed by the series promoter like ACC was and Fanatec for good measure. But that is a very rare case.
Normally the series owner wants money, not the other way around.
 
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Austin Ogonoski
Thanks for finally covering this. I've been following the antics of MSGM for about a year and all signs point to it being some sort of stock market scheme as opposed to a legitimate sim racing publisher/developer.

It has been excruciating to read some of the stuff online from younger kids, who don't understand what this means and believe we just need to be patient - waiting for MSGM's 2nd or 3rd attempt at a NASCAR game, or their first IndyCar game. before we can truly judge them.

They seem to not comprehend what "stock market scheme" means, and that the company will never progress beyond outsourcing development of racing sims to a team of Russian web developers who have never seen the sport in question, while the CEO receives a 632% pay increase.

The reason we've never heard of Dmitry Kozko before his first foray into sim racing with MSGM, is because he was part of a Russian tech company connected to scam artists. There is some crazy stuff online about how Net Element operated, from this tirade on an investment forum to an investigation for breaching fiduciary duties.

In a very embarrassing moment for the sim racing industry, it appears almost nobody did their due diligence when it came to this company and this is going to take a load of innocent people, workplaces, and IP's down with them.

The board figured this out yesterday.
 
Eric Rowland
Ole Marius Myrvold said:
I wish I shared your optimism. I see no reason why WEC suddenly will get their game now, when they didn't back when WEC was a lot more popular.
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WEC and esp. LeMans 24 are about to get very popular......
Ferrari, Porsche, BMW, Lambo, Cadillac, Peugeot, Toyota, etc ....
 
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T
I think people need to hold their horses a bit and relax. Anybody remembers what happened to Simbin and their Raceroom game? Or to Papyrus? A name change of the company, a new investor and they are still around to this day. And if anyone saw something valuable in those games at that time, it's pretty safe to say that rF2 and the people developing it will have a future, one way or another. And even if it stops being developed, I am pretty sure it will stick around on peoples hard drives and people will go nuts with modding it. The developers will find a place somewhere else easily, as sim devs are hard to find these days. rF2 is in a very solid state now, alot more fleshed out than rF1 ever was and we all know when the prime time of that sim started.
 

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