Delisting Posse Heads to Ambac (FNM, FRE, ABK)

July 6, 2010 by Jon C. Ogg

We already knew all about the big delistings for Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE).  Now the delisting process is heading the way of Ambac Financial Group, Inc. (NYSE: ABK).  After the closing bell, the company disclosed that the New York Stock Exchange notified it that the company does not meet the proper listing requirements.  The big difference here is that both Fannie and Freddie are headed to the OTC-BB, while Ambac is going to try to keep its NYSE-listing.

The share price has fallen below the NYSE’s continued listing standard, and the requirement is that the average closing price of a listed common stock has to be at least $1.00 per share over a consecutive 30 trading-day period.  Shares closed at $0.66 today, after a near 3% gain, but the last date that Ambac even closed above that poor $1.00 mark was June 8.

Ambac is not being booted off of the exchange just yet.  The company has six months from the date of the NYSE notice to obtain a closing share price and 30 trading-day average share price of at least $1.00 to avoid the ultimate delisting.  The company can also ask for exceptions and/or extensions, and sometimes the exchange grants waivers.

Ambac will continue to see its common stock trade on the NYSE during this period, and Ambac said in the release that it has notified the exchange that it intends “to cure the price deficiency.”

The easy way out is of course the reverse stock split.  If not, the company can seek alternatives and sell off or close down certain operations that are adding to the losses.   There is another common theme companies sometimes try… turning on their press release machines.

It is no secret as to why Ambac was on our list of brands which are likely to disappear.

JON C. OGG