In December, Nasdaq told Emmis its Class A common stock was out of compliance; the minimum bid price closed below $1 per share for 30 consecutive days.
Emmis Communications CEO Jeff Smulyan says the company is rectifying that situation.
Emmis has 180 calendar days, or until June 6, to fix it, according to a statement in the company’s latest filing with the Securities and Exchange Commission.
Speaking with analysts at its Q3 earnings call, Smulyan said “We’re working on this” and the issue is “can you show growth?”
“This has happened before,” he said. Smulyan said it’s important to show growth “and also to see the U.S. radio industry to have a better perception.” He mentioned Spotify has a market capitalization of $9.5 billion, “and yet loses $200 million.” He characterized the Spotify market cap as “really four times the entire market cap” for all of radio, equity value which is frustrating.
Radio has not been able to garner capital and “we hope some of the things we’re doing with NextRadio and other initiatives” will show the public that radio is still vibrant, he said.
In the meantime, at the end of the 180 days, Nasdaq will tell Emmis if it’s back in compliance; if not, then that stock would be de-listed.
Emmis reached agreement with shareholders of more than 80% of preferred stock in December to convert that into common stock at 2.80 shares of common stock for each share of preferred stock. This, plus a favorable court decision this summer allows the company to resolve outstanding litigation on this issue, Smulyan said, plus remove the preferred stock from Emmis’ capital structure when Nasdaq delists it. A shareholder meeting is set for Feb. 17 to vote on the terms.