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VIDEONYSE Saves Its Penny Stocks
By
Scott Reeves Feb 25, 2009 2:45 pm
Brief scrutiny of today's headlines.
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Some major companies are trading at less than a dollar -- dreaded penny-stock territory --but the exchange may change the rules to avoid delisting them.
Under current rules, a stock can’t trade below $1 for more than 30 consecutive days. If it does, the company has about 6 months to convince the NYSE it can boost the stock price above a buck.
In October 2008, NASDAQ announced a 3-month suspension of its minimum bid and market value, and extended the new rule in December of that year.
Stocks listed on the New York Stock Exchange that now would benefit from relaxing the $1 rule include AIG (AIG), Newcastle Investment (NCT), Hovnanian Enterprises (HOV) and McClatchy Newspapers (MNI).
Well, that figures: An insurance company that took a belly flop, a real estate investment trust, a homebuilder, and a company that prints yesterday’s news on expensive paper and then hires kids on bicycles to deliver the finished product to customers. Brilliant!
There may be several candidates waiting to take advantage of the NYSE's outbreak of the warm-fuzzies, including General Motors (GM), which recently fetched $2.53 a share; Ford (F) at $2.07; EW Scripps (SSP) at $1.16; and Office Depot (ODP) at $1.15.
There! The companies are sure to feel better about themselves. Kumbaya, chief executive officers.
But investors? For anyone holding, say, McClatchy stock, a passbook savings account looks good right about now.
No positions in stocks mentioned.
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