The Sacramento Beereports that The McClatchy Company—the Sacramento-based parent company of The News & Observer and several other dailies across the country—has been warned by the New York Stock Exchange that its stock price has fallen below the $1-a-share minimum threshold, jeopardizing the company’s continued listing on the exchange.
From the story:
McClatchy’s stock price has faltered as the company continues to struggle with a long-standing decline in print advertising and the transition to a digital-first strategy. The company revealed that it received a notice Monday that its shares don’t comply with the New York exchange’s “continued listing standard.” That requires that the average closing price remain above $1 over 30 consecutive trading days.
McClatchy has six months to come into compliance. In a statement to the SacBee, McClatchy said that “it intends to cure the price deficiency.” Delisting would mean that McClatchy would have to trade its publicly owned shares on a different exchange; insider shares would not be affected.
McClatchy acquired the N&O in 1995, and though the paper itself runs profitably, expense-cutting efforts—including newsroom layoffs—have been ongoing. As in most of the industry, the paper’s revenues are down in the first half of the year.
Orage Quarles III, the N&O publisher who has steered the paper through hard times since he was hired in 2000, said he couldn’t comment on the delisting warning and how it could affect the daily.
Rick Edmonds, a media business analyst for The Poynter Institute, said that while the warning reflects that McClatchy is tightly pressed, he doesn’t think “it’s a huge event financially for the individual dailies.”
“Finding money to invest in new ventures or to support the newsroom at size has been difficult generally,” Edmonds says. “Local readers may see some of that and from following it nationally, it appears the paper is generally committed to lowering expenses. It’s not exclusive to the newsroom. If you’re having a particularly bad year, you’re under more pressure to do expense cutting.”
McClatchy, which closed at 92 cents on Friday, was threatened with delisting in 2009 and came back into compliance.
McClatchy president Pat Talamantes said in a statement that McClatchy has “strategies to move our company forward in this ever-changing media environment and have faith in our future as a leading local digital media company in 28 strong markets across the nation.
“We are excited about our ability to purchase shares at attractive prices and return value to existing shareholders.”
