Share of Magna Entertainment Corp. have traded under $1 for more than 30 straight days, prompting NASDAQ to notify the racing and gaming company it was out of compliance with marketplace rules and faces delisting.
The Class A Subordinate Voting stock price of MEC closed Feb. 11 trading at 74 cents, the 30th straight day shares finished below $1. Per NASDAQ marketplace rules, the company now has until Aug. 11 to come back into compliance by trading at $1 or higher for 10 straight business days. NASDAQ can possibly modify the deadline date based on other circumstances.
“… the notice states that if MEC cannot demonstrate compliance with such rule … the NASDAQ staff will provide MEC with written notification that its Class A Subordinate Voting Stock will be delisted,” said a MEC release issued the evening of Feb. 13.
The release said the ruling has no affect on shares traded on the Toronto Stock Exchange. MEC’s headquarters are located in outside of Toronto in Aurora, Ontario. A call to MEC officials was not immediately returned.
Shares traded on NASDAQ closed Feb. 12-13 at 76 cents and 78 cents, respectively. The last time MEC shares were at $1 or above was Dec. 27, 2007, when the price closed at $1.02.
MEC has struggled financially for the last several years, with debt levels reportedly approaching $600 million. The company has posted combined net losses of $359.1 million in the last three-plus years, including a loss of $49.8 million for the third quarter of 2007. Fourth-quarter and year-end results are expected to be released in the next few weeks.
The company last year announced a plan to drive down debt by selling some of its properties, including some of its racetracks, in an effort to raise up to $700 million. Several properties have been publicly listed with real estate companies, including racetracks such as Great Lakes Downs in Michigan.
On Dec. 21, 2007, the company announced it had sold land in Austria to a subsidiary of its parent company, Magna International, for about $28.7 million, and land in Porter, N.Y., for about $1.8 million.
MEC, which began trading on the NASDAQ board in February 2000, realized an all-time high share price of $9.75 on Jan. 31, 2002. The 74 cents recorded Feb. 11 was an all-time low.