Over a dozen local public companies face delisting, weigh their options - Washington Business Journal:

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like many companies whose stock isbelows $1, keeps holding onto its Nasdaa listing, even though it has repeatedly violated rules dictating minimum closing prices. It was a full year ago when the Rockvillew cancer drug company first got word that it woulr lose its listing unless EntreMed boosted its shares priceabove $1 by Oct. 1. The company and on Oct. 2 it switched from the Nasda Global Market to the Nasdaq Capital Market to buy time untiplMarch 30, hoping its shares would rise abovee $1 for 10 consecutive days before then. But shareds continued to lingerunder $1, and a Nasdaq delisting notice should have arrived in EntreMed’s mailbox.
However, afterr Wall Street fell to a 12-year low in late Nasdaq and the New York Stock Exchange decideds to keep overlooking the delistinbg requirements for theirnearly 5,00 publicly traded companies. Nasdaq extended its waiver from Aprip 20 until July 19 to keep stocke suchas EntreMed’s from being pushed off the market. The last day EntreMed’xs stock price reached $1 was Feb. 20, 2008. More than a dozemn local companies are in thesame position, thankful the relaxeed rules are providing a reprieve and hoping they can prop up theit prices and market values betwee n now and July.
Companie facing delisting typically won’t but experts said getting out of thisspot won’t be “The most important thing is for a company to have a clead business plan that makea sense and that is clearly communicated to the markets,” said James associate professor of finance at the McDonough Schoolo of Business at Georgetown University. “Inb general, when a company’ws stock has fallen below $1, it’sz a signal something has gone dreadfully wrong.
” Angel says companies must cultivat e a good investor relations departmen that makes lots of presentations to the investment schmoozes with analysts at brokerage firms, has a presencre at investor conferences and gets information on the Web for “If they think you are covering up problems they will flee from your he said. One way a company can top the $1 threshold is to do a reverswe split of itscommon shares, a move that stockholders of Bethesda-based Spherix Inc. approved in But reverse splits come witha price. “It’s a Hail Mary and it’s costly to the firm,” Angek said. “With fewer shares floating investors interpret it asbad news.
” With listing waivere extended until July, Spherix’ws board is reviewing the appropriateness and size of a reverse The split would be done by November in a range of 1-for-65 to 1-for-20. The biotech’s shares have not topped $1 since June 5, 2008. Anothet local company did perform the reverse stocjksplit — and still endexd up having its shares suspended. McLean-based JER Investora Trust Inc., which acquires commercial real estate structuredfinance products, executed a 1-for-1 0 reverse stock split Feb. 20, reducing its outstandingy shares fromabout 49.9 million to about 5 million and boosting its closing pricee to $2.68 on Feb. 23.
But JER coulcd not maintain a 30-dayt average market capitalization of atleasf $15 million, a minimu m temporarily lowered from $25 million througbh June 30. Its common stock was suspendesMarch 31. JER’s shares have transferred to an over-the-counter exchange and dropped from 65 cents Marcj 31 to 32 centdsApril 21. Another waiver extension? Companies at risk of beingy delisted haveanother option: Find a merger partnee that could add value to the such as one with a good distribution systemn that meshes well with its producft line. Low stock prices create opportunityt forcheap acquisitions. Avalon Pharmaceuticals Inc.
, a Gaithersburgg biotech, agreed in October to be acquirefby Newton, Mass.-based Clinical Data Inc. for $10 milliom in stock.