Wednesday, February 4, 2009

17 days to go

Just 17 days. Justin Kendall at The Pitch:
If McClatchy's stock stays under a $1 -- it closed at $.69 yesterday -- for 30 consecutive days, the newspaper conglomerate will have to submit a plan for getting the price over a buck. Only 17 days to go.
More at The Source


Anonymous said...

Sick, isn't it? But, I've had my calender marked for 13 days now!

Anonymous said...

they just have to get it above $1 1 close in the next month to avoid starting the process.

if they don't then they have 6 months to have it close above $1 for 30 days.

not a big deal as the NYSE is also looking to relax rules in this regard because they will be losing a lot of paying customers in this unprecedented time.

plus all they have to do is do a reverse stock split and instantly be above the $1

McClatchy Watch said...

Anonymous 10:32 -- MNI has options available to them to avoid delisting - stock split, anticipating the rules to be relaxed, etc.

But there is a psychological issue at play here that MNI is concerned about-- many investors won't touch a stock that is going through gyrations to avoid delisting. And some funds do not allow investment in companies facing the threat of delisting.

Archer05 said...

Perhaps in these bad economic times, the NYSE will be even more lenient. It seems to me, delisting strapped companies could number in the hundreds, as this downturn continues.

Anonymous said...

Archer is correct that the NYSE gets its money from companies being listed. Delisting A LOT of companies will hurt their business.

The biggest psychological effect facing MNI was them canceling the dividend. One the new ex-dividend date hits it will be interesting to see if it tanks or not. (It didn't go down that much when initially making the announcement).

Tomorrow will be interesting with the 4th quarter earnings results.

Anonymous said...

Actually folks the relaxing of the regulations is only a minor relief. Basically all they are doing is lowering by a few million the minimum market cap. If memory serves down to 10 million or so.

As far as anyone thinking that the NYSE and the NASDAQ make a lot of money from listing fees. Think again. Listing fees amount to only a small fraction of their income. So small that it would not even be noticeable on their bottom line. (by design. They're not stupid enough to get held hostage by member fees)

FYI - 129 companies were de-listed in 2008 with 3 new ones in January.
By way of contrast, in 2003, 226 compaines were de-listed.

Relaxed rules expire April 9, 2009

Accounting tricks such as reverse splits do nothing to prevent de-listing. They have no effect what so ever on market cap. At best, they delay it. That is all.