The entire board of directors for the Florida racing game studio Motorsport Games has apparently resigned. Though the reason for the resignation is somewhat dry, it essentially boils down to a difference of opinion over funding, although it's clear the difference of opinion was pretty seismic.
According to an SEC filing, Motorsport's board members resigned due to a "disagreement with Motorsport...regarding proposals...to raise additional capital for the Company". The document doesn't go into any more detail than that, but according to Insider Gaming, this is a reference to a "1 for 10 reserve stock split", which refers to increasing the number of shares in a company so as to make shares seem more affordable to potential shareholders.
An email obtained by Insider Gaming shows Motorsport CEO Dmitry Kozko reassuring staff that the stock split decision was "made in the best interest of the business and the team", and that options regarding raising funding for Motorsport were "still being explored and considered".
Despite Kozko's assertions that his actions were in the best interests of the company, an employee speaking to Insider Gaming seems to disagree. They say that this represents the "usual bullshit", and that Kozko "just wants money", pointing to him having "done these things twice before". Insider doesn't go into any more detail regarding what the employee may have meant by this.
It does, however, point to several other employee sources who have allegedly said that Motorsport has been hemorrhaging employees recently, with several jumping ship "for one reason or another". Motorsport is due to report its earnings for the Q3 2022 period this coming Friday, so we may well learn more about why employees have been leaving the company then.
You might recognize Motorsport Games' name from franchises like NASCAR or rFactor. The company deals exclusively in racing sims; it's a little like the US equivalent of a studio like Milestone in that regard. Motorsport is also an esports partner for events like the FIA rallycross championship and Le Mans, so you'll have seen its name if you're a racing aficionado.
Whatever the status of the company might be, the fact is that it doesn't currently meet NASDAQ's requirements for a publicly traded company due to the resignation of its board. We'll have to wait and see how Motorsport intends to resolve that situation. Stay tuned for more.
