By: Mark Fitzgerald Lee Enterprises will attempt to stay listed on the New York Stock Exchange (NYSE) through a reverse stock split that would convert as many as 10 shares of its struggling stock to a single share, the Davenport, Iowa-based publisher disclosed late Thursday.
In a filing with the Securities and Exchange Commission (SEC), Lee said at its annual meeting March 10 it will ask shareholders to approve a reverse stock split for its common stock and Class B supervoting stock "in a range of not less than five and not more than 10 shares into one share" of each class of stock.
A reverse stock split would instantly raise the price of Lee's stock, which has been languishing well below $1 a share for about two months.
Lee was notified in late December by the NYSE's enforcement arm that its stock (NYSE: LEE) no longer meets exchange's listing standard because it has traded below $1.05 a share over a 30-day average. NYSE Regulation Inc. also warned Lee that its market capitalization was in danger of falling below the $25 million minimum.
Lee ended trading Thursday unchanged at 37 cents a share. Its indicated market cap was $16.68 million.
If shareholders approve the reverse stock split plan, the price of Lee, based on Thursday's price, would increase to between $1.85 and $3.70, depending on what ratio its directors chose.
Lee disclosed in the SEC filing that its board of directors unanimously approved the plan on Tuesday.
In its proxy for the annual meeting, Lee argues that its stock price is depressed by broader market conditions, and that raising the stock price would improve the perception of the stock as better than a speculative investment.
No analyst rates Lee stock a buy, and, one, Tom Corbett of Morningstar has assigned a "fair value estimate" of the stock as "zero."
More details of the reverse stock split proposal are at E&P?s business-oriented blog
Fitz & Jen blog.
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