Thursday, November 20, 2008

Could McClatchy get kicked off the New York Stock Exchange?... a new rule makes it easier for McClatchy to stay

Several commenters here have noted McClatchy is in danger of getting kicked off the New York Stock Exchange due to its share price approaching $1.05 a share. But a new rule makes it easier for McClatchy to stay with the NYSE -- even if its share price falls under the $1.05.
So NYSE this week eliminated the so-called "sub-penny trading halt" rule, allowing Blockbuster and the rest to return to floor trading.

If either Lee or McClatchy, the two companies flirting with penny stock levels, falls below the $1.05 mark, they can continue to trade everywhere while trying to push the price up.

This doesn't eliminate the threat of delisting for companies that cannot keep their share price above a buck, however. NYSE Euronext spokesman Ray Pellecchia tells E&P that eliminating the sub-penny trading halt was a technical rule change -- listing compliance regulations are still in full effect. Companies with share prices that close below an average $1.05 over a 30-day trading, or whose market cap falls below $75 million, will be ordered by NYSE Regulation Inc. to put together a plan to get the price up consistently within six months.

In reality, it doesn't take that long. Journal Register Co., Sun-Times Media Group, and GateHouse Media Inc. all left the Big Board within a couple of months of their compliance warnings.
Underachievers get a break!

8 comments:

Anonymous said...

Listing on the NYSE is way down on their list of worries. They're about to go cash flow negative. Once that happens, they'll begin to sell off individual newspapers to keep the lights on and the phones working.

If they can find any buyers...

Walter Abbott

Anonymous said...

It is a double edged sword. Without the halt bad companies have nothing to prop them up and market forces can determine who survives and who goes by the way side.

Right now there are two full pages of companies that should have gone under that have been staying alive by having their trading halted every time they take a dip.

Give it time. You will see that the companies that do not deserve to be listed will disappear along with their bad management.

Anonymous said...

I was looking back at monthly revenue numbers for mcclatchy at http://www.mcclatchy.com/176/index.html. I didn't see a single month since the KR acquisition that didn't have declines. Has MNI had an up month and I missed it? If I'm right, that's almost two years of consecutive monthly declines.

Anonymous said...

To 6:09

IIRC, no major newspaper company has had a revenue increase (compared to the prior year) at all for the past 2 to 3 years. If they did, it was just a blip.

Walter Abbott

Anonymous said...

It is not just the stock price, but the market capitalization. MNI today trades about $1.50 with a market capitalization of $122 million. If the price drops a third, capitalization will drop a third, too. So if it goes under $1, it will be at the $75 million capitalization level as well.
There is one way out, and that is a reverse split, giving one share for every 10 that stockholders currently hold. Stockholders don't like this because it devalues the shares they hold, but it would result in increasing MNI's price over the $1 threshhold. But it does nothing for capitalization.
I think Pruitt has screwed this up so much we are in the doghouse. The stock market reflects what some very smart people think of MNI's future. My issue now is why the board of directors don't see this and do something, and do it now.

Dave D. said...

..7:21, Because Mr. Pruitt reflects the beliefs and values of the board. Besides, there is nothing to be done for it. It is unfixable. Forget about the big picture, you are not a player and the players aren't going to save the company. Nothing will save McClatchy, or almost any other newspaper company, from bankrupcy and closure. Look to your own interests. McClatchy is as good as gone. You know this.

Anonymous said...

IIRC, no major newspaper company has had a revenue increase (compared to the prior year) at all for the past 2 to 3 years. If they did, it was just a blip.
=========================

Total BS. The WSJ and USA Today have been doing great thank you.

Anonymous said...

USA Today is owned by Gannett. Their 07 revenues declined from 06. 08 revenues will be down from 07.

See the numbers here.

http://au.finance.yahoo.com/q/is?s=GCI&annual

Walter Abbott