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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mclaren777
Danny Giusa said:
I doubt that. The payments which was made upfront probably got eaten away by the cash burning rate of MSG.

Also the player numbers of rF2 are to small to get enough reinvestment through sales, probably.

Look at the avg. players per day, even with LFM starting the player numbers didn't sky-rocket, but why? Because few people own and are willing to drive rF2 on the regular to make a significant improvement over the slow creeping death of it.
(Not to mention that since two month Virtual Le Mans is running and at least 100~150 people run rF2 due to this championship)
View attachment 617357

Just in comparison to successful titles. (Noted that ACC slows down on the growth rate)
View attachment 617358

rF2 died on the day when it failed to continue the success of rFactor as the ultimate base for community modding. This left a big gap in the market to be filled by Assetto Corsa, which they filled and OH BOY, how they filled, extended and overcome this.
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Where did you get this data from?
 
BertramRaven
Premium
DaVeX↯ said:
I really would like to see S397 joining forces with Reiza, was my dream before Reiza moved to madness engine...

...on the other hand I think another good option would be if Sector 3/kw studios/Raceroom studios will jump in and acquire S397...

Rf2 tech and Raceroom content....hell yeah!
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Remember, PC2 *uses* the Madness Engine but the engine does not provide everything. Reiza wanted the graphics, not the physics. Reiza have added their own FFB engine and replaced the physics. It feels so much better than rf2, now.
Reiza have announced they are to make adding modded content to the ME much easier. I notice they did not make that announcement until after the Indycar debacle - expect modern Indycars to appear as Formula USA Gen4 (community edition) over the next few months.
 
BertramRaven
Premium
MadDriver11 said:
I doubt that in a financial report they would state their numbers are horrible and bankruptcy is incoming... The fact is that when you read the amount of revenues yearly vs the amount of losses you clearly understand there is no way you can reasonably think to turn them around in a year or two just reducing heads count.
Apart from impairments and such they have spent 18M in cost of revenues, sales, overheads and development to generate 5.5M revenues.
Not exactly a viable business
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If they hide anything, that is fraud. In the USA it is possible to go to prison for fraudulent filings for a longer period than murder.
OTOH, the licences they have purchased also have a value. If the company folds, the licences are likely to go to the purchaser of any remaining assets unless BTCC, Indycar, LeMans etc have clauses which say the licence is revocable without reimbursement should the company fold or any targeted asset (such as a new game) not come to market within a given time.
As I read it, MSG have until July to make good on their Indycar game.
 
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K
BertramRaven said:
Reiza have announced they are to make adding modded content to the ME much easier.
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They did, yes, but what I read is that AMS2 will never be as "modable" as AC or even AMS1. I believe the Madness engine makes things a bit complicated for mods.

Still, what Reiza has done with the engine so far is excellent and there are more improvements coming our way.
 
R
BertramRaven said:
If they hide anything, that is fraud. In the USA it is possible to go to prison for fraudulent filings for a longer period than murder.
OTOH, the licences they have purchased also have a value. If the company folds, the licences are likely to go to the purchaser of any remaining assets unless BTCC, Indycar, LeMans etc have clauses which say the licence is revocable without reimbursement should the company fold or any targeted asset (such as a new game) not come to market within a given time.
As I read it, MSG have until July to make good on their Indycar game.
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Well it is always easy to do some magic thing with the figures, considering that this kind of big company generally hires one of the "big 4" to validate their accounts, which is just a fraud by essence :D. These big 4 are some of the worst things in the economy, incompetent people (no offense, but most of them aren't accountants and are just rookies just controlling check lists, the promise of their jobs being a network, not knowledge) who get paid be ause they accept their client conditions (less hours, so impossible to check the accounts). How many shareholders have lost years of investments, being confident with incompetent CEOs backed by their financial teams who are able to lie to these big 4's employees, shutting down companies and jobs,, it still amazing these small 4 still exist.

Well, just a small rant about these comapnies' killers. They were 5 before, they are 4, does anyone really think that only one of them was a bad one? :D

The worst thing is that these incompetent people promote their peers as CFOs or CEOs, keeping the huge fraud system alive. Shareholders lose money and then people lose their jobs. Will that go on forever?
 
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R
BertramRaven said:
Remember, PC2 *uses* the Madness Engine but the engine does not provide everything. Reiza wanted the graphics, not the physics. Reiza have added their own FFB engine and replaced the physics. It feels so much better than rf2, now.
Reiza have announced they are to make adding modded content to the ME much easier. I notice they did not make that announcement until after the Indycar debacle - expect modern Indycars to appear as Formula USA Gen4 (community edition) over the next few months.
Click to expand...
The engine provides a complex tire model, which is hard to master. If it was for the graphics, UE5 would.h1ve been a much better choice.
 

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