Shares for publishing company Lee Enterprises fell to under $2 a share yesterday, closing at $1.95. McClatchy just might be descending to that level. Down 5 percent in late-morning trading, McClatchy is at $2.11 a share -- barely above its 52-week low of $2.03 a share.
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To see the dangers of going under $1 a share, see here.
2 comments:
If it goes below $1, then it will be delisted. IMO, the share price is a vote of confidence in a management team that is taking into the pits a company that could once boast secure jobs and a secure future. We need a psychiatrist to understand why Pruitt made the reckless move buying Knight Ridder when the industry laughed. Must be something about his father never being able to get higher in life than a motel manager.
Actually if it goes below 1.00 the stock is halted under the sub penny rule. They then have 6 months to get the price back up before being de-listed entirely. On the brighter side, the effects have other consequences that help to assure failure at that point. Being de-listed from the S&P means less exposure and removes them from automatic buys from Index and related funds.
Pricing below one dollar also removes them from baskets of available stocks from most brokerages, which increases the cost of purchasing shares considerably, sometimes as much as 1/2% just to buy them.
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