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Zumba publisher Majesco plans to avoid delisting with reverse stock split

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Zumba Fitness publisher Majesco Entertainment is seeking stockholder approval to split its stock and avoid Nasdaq delisting, according to a document submitted to the U.S. Securities and Exchange Commission this month.

As of this writing, Majesco is trading at $0.54, but the stock exchange requires a minimum $1 share value. The proposed split is primarily designed to raise the value beyond that minimum threshold and avoid delisting. According to the SEC-filed document, Majesco's Board of Directors also believes that a higher share price could lead to an "increased level of institutional stock ownership" and allow the company to raise capital.

The publisher revealed in March 2013 that Nasdaq had given it 180 calendar days to raise its stock price or face delisting. In August 2013, Majesco received a 180 day extension to Feb. 14, 2014.

Majesco's most recent financial report, released in January 2014, disclosed a 64 percent decline in net revenue year-over-year for the fourth quarter ending Oct. 31, 2013. Majesco CEO Jesse Sutton said that 2013 was transitional and "unfolded as [the company] expected." He also revealed that Majesco would not pursue a "fixed long-term agreement for new sequels" in the Zumba franchise. Instead, the company will focus on publishing fewer games based on established brands while investing in its casino and digital lottery businesses as well as its indie-focused Midnight City publishing subsidiary.