Is Lara Croft about to run out of lives?
SCi Interactive, which owns the Tomb Raider video game franchise, is in a bad situation: It has about $24 million in cash and about $200 million in debt. That won’t keep the company running much longer: For the six months ending December 31, the company lost about $170 million on revenues of $150 million.
The big picture makes sense: Big media is trying to get into video games any way it can, and snapping up a pre-established franchise, at a fire-sale price, has some logic to it. But buying a money-losing company is tougher than it looks. SCi has been trying to sell itself for months, and was close to a deal in January. When the talks fell through, the company’s shares fell 54% and management was ousted; new CEO Phil Rogers has already fired 25% of his employees.
To give you an idea of how far the company has fallen, Time Warner bought its stake in SCi for about $90 million in 2006. Now those shares are worth about $11 million. If these current buyout talks don’t lead to anything, then this may be one tomb that even Lara Croft can’t get out of.
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