CNET también está disponible en español.

Ir a español

Don't show this again

Christmas Gift Guide
Internet

K-tel may get knocked off Nasdaq

Nasdaq officials notify the music distributor that it will be delisted from the trading system Monday for failing to meet minimum asset and market capitalization requirements.

Nasdaq Stock Market officials notified music distributor K-tel today that it will be delisted from the trading system Monday for failing to meet minimum asset and market capitalization requirements.

In a statement, the company said it has appealed the decision. Nasdaq requires listed companies to have a market capitalization or assets and revenues totaling at least $50 million. K-tel's capitalization had fallen to $18.7 million by market close yesterday.

K-Tel chief financial officer A. Merrill Ayers said the company does not expect to be delisted Monday since the Nasdaq must decide the appeal before any action is taken.

"The company is in a turnaround and looking at a wide variety of options" to maintain its listing on the Nasdaq, Ayers said. He added that the company also has applied to be listed on the Nasdaq Small Cap market.

Nasdaq officials told K-tel in May that it faced delisting. The company said it had submitted a plan for coming into compliance, but that was rejected.

K-tel saw its shares spike from about $3 a share to near $20 two years ago, when it announced plans to sell its products on the Internet. Since then, the company's stock has steadily dropped. It was hovering at $1.13 a share in late trading today--down more than 80 percent for the year.

The delisting warning comes as the company is struggling to overhaul its businesses.

In July, the company closed its German operations and cut 88 jobs as a cost-saving measure. It also cut 35 jobs in the United States in June and combined its two U.K.-based operations into one facility in April.

Although the company has managed to trim expenses, its revenues have declined sharply in recent months.

For the third quarter ended March 31, the company reported a loss of $5.6 million, or 56 cents per share, compared with the prior year's third-quarter net loss of $4.7 million, or 50 cents per share. Net revenues for the third quarter were $12.9 million, compared with $18.5 million for the same period in 1999.