Uh-oh.
The stock price for WPT Enterprises has been consistently falling, with the exception of a minor fluctuation in early July, since it dropped below $1 per share in late June 2008. And despite CEO Steve Lipscomb\’s \”don\’t worry, be happy\” attitude about it, NASDAQ isn\’t cool with that mantra. In the next 180-day time period, if WPTE\’s price doesn\’t stay above $1.00 for 10 consecutive days, the company will be delisted.
Here is the statement released today:
WPT Enterprises, Inc. Receives Nasdaq Staff Determination Letter Regarding Minimum Bid Price
LOS ANGELES, Aug 19, 2008 (BUSINESS WIRE) — WPT Enterprises, Inc. (NASDAQ:WPTE) today announced that the Company received a Nasdaq Staff Determination Letter on August 14, 2008, notifying the Company that it was not in compliance with the minimum stock listing price requirements of Nasdaq Marketplace Rule 4450(a)(5) as a result of the closing bid price for the Company\’s common stock being below $1.00 for 30 consecutive business days. This notification has no effect on the listing of the Company\’s common stock at this time. The Nasdaq Marketplace Rules provide the Company with 180 calendar days to regain compliance, which will require the bid price of the Company\’s common stock to remain above $1.00 for a minimum of 10 consecutive business days. The Company will continue to execute its business plan to provide an opportunity to demonstrate value to the investment community and regain Nasdaq compliance.
This is really a non-issue. They can do a reverse stock split to get themselves back over $1, and their problem is solved.
I’ll take your word on that, but that doesn’t solve the problem of the lack of public confidence in the company.
That’s the more important issue. Although it looks like someone’s buying stock today in WPTE, it’s up 14 cents to 0.86 near the close.
If I’m reading my stock alert correctly, it’s Brad Berman who bought a ton of shares today.
that’s not necessarily a bad thing when one of the heirs of the company invests heavily in it. he obviously knows of future plans.
still, the future is as the future does … in the present tense, it’s gotta be a bit of a slap in the face to have NASDAQ say, hey, when it comes to American businesses, we’re not so sure you’re worthy of our agate.
Yup, reverse stock split 10-1 and stock goes to $8.60 vs. .86 today. Then, as the fundamentals don’t improve (ie. financials – companies aren’t run as personal piggybanks/ability to be a publicly traded CEO) the stock price can slide back to $1, only to lose another 90% in value…..effectively 99% of initial principal amount 🙂
I’d take my odds at the 2/5 NL table vs. buying stock in WPTE 🙂 At its core, that is the issue 🙂 Their potential/current shareholders don’t like their odds 🙂
AA out
There was one block trade of 30k shares today @ 81 cents. Hardly a major investment, whoever it was.
They would be smart to do the reverse split to maintain their listing b/c if they go by way of pink sheets… it makes raising capital even harder in an already constrained environment.
It’s been a while since I looked at their financials, but at that time I didn’t see any reason why this company should continue to exist. Falling revenues, increasing expenses, and no prospect for growth or new business. WPTE is already losing significant money and has no apparent plan to reverse that trend.
Seems like the company has significant liquid assets/investments – liquidate and pay off the shareholders before the cash is gone too.
I love it when a non-financial guy acts like he knows the market.
“liquidate and pay off the shareholders before the cash is gone too.” Do you know how the market works, son?
A reverse split doesn’t work here, I don’t think. Total market cap may be lowered and stock may not fit parameters of institutional buyers, thus reducing the liquidity of the stock. And now with less shares outstanding, the volatility goes up. Stock is now marginable and short sellers are all over it since company can’t control its admin expenses. Revenues are not falling, company’s only been publicly trading for 5 yrs. Good news is no LT debt, book value is $1.40, which makes the stock a good value here.
I’m surprise at u, Al, I know u are a financial expert too.
Dear Financial Snob:
I understand that no public company will EVER do it, but my point was that the noble thing to do here would be to wind up operations when current obligations expire and distribute the company’s net assets to shareholders, given the liquid nature of those assets and the fact that those assets represent a significant premium to the current share price. The company has one product that has decreasing demand yet increasing production costs, and they are selling that product for less and less each time they are forced to find a new distributor for it.
Instead, they will continue to burn through cash until there is none left, effectively screwing the shareholders out of the small consolation that they would receive if WPTE did the “right” thing. Unfortunately, the outfit is too small for a “Shareholder Value” advocate to jump on board and start pushing the issue.
Regarding revenues – From WPTE’s latest 10-Q…”Revenues decreased by $2.2 million, primarily as a result of a decrease in domestic television license fees, which is due to lower per episode license fees under the GSN agreement in effect during the 2008 period, as compared to the Travel Channel agreement which was in effect during the 2007 period.”
Do you think that FSN is paying MORE than GSN did? I can’t find the terms of the FSN deal, but it’s doubtful. And if FSN was paying more than GSN, don’t you think WPTE would publicize that effect as some hope for good news?
Oh yeah, but let’s not forget those sponsorship revenues…I’m sure the deal with Blue Diamond Almonds will make a HUGE difference.
Q3 2008 revenues are projected in the range of $2.2-$2.6 million, compared to $4.4 million for Q3 2007. Sounds like a decrease to me.
Okay, scratch the theoretical liquidation too. Half of WPTE’s “liquid” assets are in auction-rate securities based upon Student Loan portfolios. Good luck getting your cash out of those.
Bottom line – WPTE’s founders made a nice chunk of change after the IPO, as evidenced by the steady stream of Form 4’s in the $16-$20 range after the IPO – clearly demonstrates where the money was to be made in this deal. The insiders didn’t do anything wrong – that’s what you are SUPPOSED to do as an insider after an IPO. It was an exciting, up-and-coming product at that time, even though the fundamentals were shaky. But now WPTE is an aging, one-trick pony.
Good luck with your “value” at $0.85/share vs. $1.40 book.
Hey Donkey… My message here was simple… pink sheets toll the death nell, unless of course you can get in on a good pump and dump scheme. Unfortunately I don’t think anyone would buy that the WPTE has the cure for AIDS or cancer, so I don’t think that would work.
Since you are anonymous, I’m going to assume since you throw those financial terms around with the greatest of ease that you have a grasp of valution, but are just misguided. Book Value is going to be a moving target… and since they’ll be burning cash if they don’t get a better revenue generating plan together, that number will continue to sink.
Anyway, good luck with your new found bargain. I hope you get your shares transferred and shipped to you, so you can wallpaper your bathroom with what will eventually be worthless certificates unless they come up with some better strategic planning.