To vote, or not to vote


That is the question at Radio One, where company officials explained to shareholders what will happen if the company’s Class A stock is delisted by Nasdaq. At the current stock price, the issue’s market value is well below the $5 million threshold set by Nasdaq for public trading – and the float is getting smaller.

CFO Peter Thompson recounted how the company had 22.4 million shares of Class A stock, which uses the ticker symbol ROIA, in 2005. Those shares hold the right of conversion to non-voting Class D, with the ticker symbol ROIAK. Some shares have been bought back by the company, but most of the decline in the Class A float is the result of conversions to Class D. Today there are only about 3.4 million Class A shares outstanding.

CEO Alfred Liggins noted that at the current stock price, the value of all Class A shares is only about $4.1 million, well below the Nasdaq threshold. But he noted there is no fear of the Class D float getting that low, so shareholders really have nothing to fear from the likely Nasdaq delisting of the Class A shares. They will still be traded in the over-the-counter market. That may not have the liquidity of Nasdaq trading, but shareholders still have the right to convert Class A shares to Class D at any time.

RBR/TVBR observation: We remain unalterably opposed to tiered voting schemes for the stock of public companies and wish the SEC had the guts to follow the stated will of the investing public and ban them. That said, under the current set-up at Radio One, which complies with current regulations, the voting power of the Class A stock is only theoretical, since Alfred Liggins and Cathy Hughes hold absolute voting control with their Class B stock. It really makes no difference whether you own Class A stock and can cast a meaningless vote, or Class D which has no voting rights. So, it probably makes sense to convert Class A to Class D, with the larger public float, when you want to sell.