Emmis Communications Corp. has been warned that it is in danger of being delisted from the Nasdaq Stock Market, the Indianapolis-based media company disclosed Thursday.
According to the Indy Business Journal, Emmis has received a letter from Nasdaq notifying the company that its stock had closed below the exchange’s minimum $1-per-share requirement for 30 straight business days.
According to Nasdaq rules, Emmis has 180 days, or until June 6, to get back in compliance. To do so, Emmis stock must close above $1 per share for 10 straight business days before the end of the 180-day period. If it doesn't, Nasdaq will move to delist the stock.The stock has fallen 64 percent since closing at $1.87 on the final trading day of 2014. It hit a peak of $2.20 this year on Feb. 23 and Feb. 24.
Without its Nasdaq listing, Emmis shares would be relegated to penny-stock status on the over-the-counter bulletin board or on the pink sheets. Once that happens, shares are harder for investors to buy and sell.
Emmis could avoid that scenario by launching a reverse stock split, a possibility the company said it was considering. A firm that did a one-for-10 reverse stock split, for instance, would give stockholders one share for every 10 they own. At Emmis' current price, a holder of 10 shares would end up with one share worth $6.80.
The situation isn't a new one for the company. Emmis has averted a delisting three times in the last six years. The company was warned about possible delistings in November 2010 and in October 2009, but its stock rebounded both times.
Emmis owns 19 FM and 4 AM radio stations in New York, Los Angeles, St. Louis, Indianapolis, Terre Haute and Austin, Texas. The traditional radio business has struggled in recent years as listeners moved to other entertainment and audio-delivery options.
Radio revenue at Emmis was down 2.6 percent during the first half of this fiscal year, dropping from $92.6 million to $90.2 million.
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