The McClatchy Co. said it has been warned that its stock price has fallen below the New York Stock Exchange’s $1-a-share minimum, jeopardizing the media company’s continued listing on the prestigious exchange.
The owner of the Idaho Statesman and 27 other daily newspapers also announced this week that its board authorized the repurchase of up to $15 million worth of its shares between now and the end of 2016.
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 Sacramento, Calif., company said 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.
The notice affects the company’s Class A shares, which are held by the general investing public. It doesn’t affect its Class B shares, which are held by McClatchy family members and other insiders and aren’t publicly traded.
The company has six months to regain compliance, and McClatchy said it “intends to cure the price deficiency.” McClatchy will continue to trade on the New York exchange in the meantime, and the company said the warning letter doesn’t affect its business operations or agreements with its lenders.
Delisting wouldn’t remove McClatchy from public stock ownership but would force the company to get its shares listed on a different exchange. McClatchy was threatened with delisting for several months in 2009 but got back in compliance with New York exchange requirements.
Buying back shares is one method of boosting a company’s stock price. “At McClatchy, we have 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,” said President and Chief Executive Pat Talamantes in a statement. “We are excited about our ability to purchase McClatchy shares at attractive prices and return value to existing shareholders.”
McClatchy shares closed Friday at 92 cents, down 4 cents.