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It seems like things only continue to get worse for online poker and the gambling industry in general. Back at the beginning of July 2005, the World Poker Tour Enterprise took their company public. During the IPO, over ten million shares of the company traded for as much as $29.50 a share. Now, fast forward to the beginning of July 2008, and shares of the WPTE were trading for one dollar. And to top things off, less than twenty-five thousand shares were being traded per day. For over a month, shares of WPTE have failed to close above one dollar.
Unfortunately for the WPTE, one of the rules of being a publicly listed company on the NASDAQ is that shares of a company cannot close under one dollar for thirty days in a row. Because the WPTE has failed to comply with the rules of the NASDAQ, they received a warning letter on August 14th. The letter, which is called a NASDAQ Staff Determination Letter, stated that the WPTE has exactly one hundred and eighty days to comply with the NASDAQ’s rules. In order to be compliant, shares of their company must close above one dollar for at least ten days in a row.
So, what happens if the WPTE fails to meet this requirement within the next one hundred and eighty days? There are a actually a few courses of action they can take. Like many other companies, they could continue to be traded on the OTC market, which is much riskier market for investors due to the lack of regulation. To avoid this scenario and remain on the NASDAQ, the WPTE may try a reverse stock split (which would double the price of their shares), or they may continue to emphasize their new business strategies in an attempt to boost the confidence of investors.
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