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World Poker Tour May Face Delisting Warns NASDAQ
Fri, Aug 22nd, 2008 @ 12:00am
WPT Enterprises Inc. (WPTE), who owns the World Poker Tour (WPT), received more bad news on top of their disappointing second quarter report. This past week they received a letter from NASDAQ warning that if WPTE's share price continued to close below $1, that they could be delisted.
The letter was triggered because the closing share price of WPTE common stock was below $1 for 30 consecutive business days, and NASDAQ has a $1 minimum stock listing price requirement.
The WPTE has 180 calendar days to become compliant, which requires that the bid price of its stock must remain above $1 for a minimum of 10 consecutive business days. If it does not, then the WPTE will be subject to delisting.
Several observers have noted that the WPTE could perform a reverse stock split. Then the number of shares would be halved, and their value doubled, which at time of this writing would bring them well above the $1 minimum required by NASDAQ to remain listed.
ALREADY A BAD Q2
Less than two weeks ago, WPTE released a disappointing revenue report for the second quarter of the year. The company saw another drop in its revenue from $7.7 million in the second quarter of 2007 to $5.1 million in the same period this year.
According to the WPTE the losses were primarily due to a decrease in domestic television license fees: a lower per episode GSN license fee during the 2008 season versus those from the Travel Channel during the 2007 season. The company also noted that a drop in hosting and sponsorship revenues in the second quarter affected its overall revenue numbers.
The Company reported a net loss for the quarter of $3.9 million, or $0.19 per fully-diluted share, compared to a net loss of $3.3 million, or $0.16 per fully-diluted share, in the 2007 period.
Subsequent to the end of the quarter, the Company announced a broadcast license agreement with Fox Sports Network (FSN) to air 26 all-new, one hour WPT episodes of Season VII of the WPT television series in the United States, across FSN's national sports cable network.
WPTE President and CEO, Steve Lipscomb, remains optimistic for the future, saying, "We continue to be disappointed in our online gaming results and have begun directing resources in our growing sponsorship business. On the other hand, we continue to be encouraged by the strength of our brand in the domestic and international marketplace."
In addition to the 26 new epidsodes on FSN, Lipscomb pointed to a second FSN collaboration, adding, "The second deal is an agreement that will provide television and other media exposure that we expect to allow us to grow our subscriber based online poker business, ClubWPT.com."
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