The New York Stock Exchange announced Friday that it will suspend trading of the Journal Register Company, parent corporation of the New Haven Register, on Wednesday because of its “abnormally low” stock price. The decision, which comes during continued speculation about impending bankruptcy for the Journal Register, followed the Thursday’s news that Moody’s Investors Services dropped the company’s ratings further down the speculative, or “junk,” ladder.
Citing the media company’s declining revenues, Moody’s lowered its corporate family rating from “B1” to “B3” and its default rating from “B2” to “Caa1,” indicating a “substantial risk of default” on its debt obligations.
The NYSE decision to seek immediate suspension follows an announcement in the beginning of April that the Journal Register Company would face delisting from the stock exchange within six months if its share price did not rebound within that time, as required by the NYSE.
The stock closed Monday at $0.31 after shooting up a few cents in the final minutes of trading. Over the past year, the stock has traded as high as $6.48, but after declining steadily, the stock price began to drop precipitously in March. Its highest closing price in the past month was $0.85.
A Journal Register statement issued April 3, responding to the possible delisting, said the company would seek to “cure the deficiency” but added that there could “be no assurance [the company] will be able to do so.”
NYSE continued listing standards that require common stock trade at a minimum average of $1.00 per share over a 30-day span.
Following the initial announcement that it faced delisting, the Journal Register announced it had hired Lazard Freres investment bank as a financial advisor to “help evaluate our strategic options.”
Since that announcement, the company’s stock has risen slightly from a low of $0.22 on April 7.
The Journal Register’s fourth-quarter financial documents show that total revenues have fallen almost 8.5 percent between 2006 and 2007, and that the company had $620 million in debt at the end of the last calendar year.
Much of the debt was incurred in 2004, when the company purchased several Michigan newspapers for $415 million, financed by JPMorgan. Since then, though, declining circulation and advertising revenues have put additional pressure on the highly leveraged Journal Register.aaron