Interplay Stock Dives Amid $15-Million Loss

By P.J. HUFFSTUTTER

Oct. 29, 1998 12 AM PT

TIMES STAFF WRITER

Interplay Entertainment Corp.’s stock tumbled nearly 46% Wednesday, a day after the Irvine game maker posted an unexpected $15.5-million loss, announced a round of staff cuts and said it will cut salaries of upper management.

The stock fell $1.25 a share to $1.50 as 2.85 million shares were traded on the Nasdaq market, up from the daily average of 118,000 shares for the last three months.

At one point during the session, the stock tumbled to $1 before rebounding slightly.

Market watchers had expected the company to turn a profit for the quarter, but delays in shipments for three games plunged the company into the red. Interplay will delay the release of its Earthworm Jim 3 and Messiah games from the fourth quarter to next year, missing the Christmas season.

These delays also could hurt the company’s revenue next quarter, say analysts, who note that the holiday season usually accounts for at least 40% of the game industry’s annual sales.

“If you’re missing the holiday quarter with your most eagerly anticipated titles, you’re off by a year,” said Seema Williams, an analyst who tracks entertainment and technology strategies for Forrester Research.

Interplay also blamed its third-quarter loss on higher-than-expected product returns and markdown allowances, and lower-than-expected sales for its Wild 9 game.

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Interplay Problems

A $15.5-million quarterly loss stemming in part from logistics problems helped drive Interplay Entertainment’s stock down from $2.75 to $1.50 Wednesday, nearly a 46% decline. Here’s how the stock has fared since the company went public in June. Weekly closing prices:

June 19 $6.00

June 26 6.00

July 3 5.62

July 10 5.50

July 17 6.50

July 24 7.38

July 31 6.75

Aug. 6 6.00

Aug. 13 5.25

Aug. 20 5.94

Aug. 27 5.38

Sept. 4 4.88