Stock in Magna Entertainment, which only five months ago went through a 1 for 20 reverse stock split to keep from being delisted by NASDAQ because its share price had fallen under $1 for 30 consecutive trading days, has dropped below that threshold again.
After opening the day at $.89, share prices in the company (MECA) had fallen to $.74 by mid-afternoon after light trading. The stock has fallen steadily since the reverse split was enacted on July 22, a move that dramatically reduced the number of outstanding shares but bumped up the price from $.37 to $6.56.
MECA share prices held relatively even until mid-September, when the global financial crisis began to unfold, and the stock has tumbled since then. MECA closed at $1.75 on Sept. 30, spiked to $3.97 on Nov. 4, then quickly fell again, closing below $1 on Dec. 8, the first time since the split it fell below that mark.
MECA received noticed Feb. 12 that it had fallen out of compliance with NASDAQ regulations after share prices closed below $1 for 30 consecutive days. The reverse split was designed to keep the company in compliance
The racetrack operating founded and controlled by Thoroughbred breeder and auto parts mogul Frank Stronach owns such tracks as Santa Anita Park and Golden Gate Fields in California, Pimlico and Laurel Park in Maryland, Gulfstream Park in Florida, Lone Star Park in Texas, Remington Park in Oklahoma, and Thistledown in Ohio. It has slot machine operations at Gulfstream Park and Remington Park. However, the company has significant debt and has never turned a profit. It also runs an account wagering company, Xpressbet, and is co-owner with Churchill Downs Inc. of the HorseRacing TV cable channel.
Plans were recently announced to restructure the company, pending the approval of shareholders in MI Developments, another Stronach company that is the largest shareholder in MECA.
Since Stronach took MECA public in 2000, the value of its stock has fallen 99.2%.
Copyright © 2008, The Paulick Report
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