• by David Goetzl , September 16, 2008

Young Broadcasting, whose stock price has plummeted to below 8 cents and has been threatened with delisting, said last week that it has shifted to another NASDAQ trading market that gives it more time to raise its share price above $1. Young, which operates 10 local stations, has moved from the NASDAQ Global Market to the exchange's Capital Market.

Since June, NASDAQ has twice notified Young that it is not in compliance with minimum standards to continue on the Global Market--first by failing to have a $15 million market value, and then a $1 share price.

Young had a hearing before a NASDAQ panel that led to its continued trading as it shifted to the Capital Market. A Capital Market-listed company gets 180 additional days to raise its stock price above $1 before a possible delisting, provided that it meets certain other financial metrics.

Young said it requested a continued listing through Nov. 28 in its hearing, which was granted. (The company's 52-week-high stock price is $2.68.)

A principal reason that Young's stock price has fallen so precipitously appears to be many investors' frustration with its inability to sell San Francisco station KRON, a MyNetworkTV affiliate. But the troubled credit markets seem to have hampered a potential divestiture.

A KRON sale almost certainly would lead to an increased stock price, and Young may be banking on that instead of opting to go private.

For the first six months of 2008, Young's net revenue was $71.9 million, down 4.4% from last year. The station group suffered a net loss of $168 million, more than triple the $43.6 million loss in the same period in 2007.

In August, company chairman Vincent Young expressed optimism that performance would improve when the economy does. "Unlike some on Wall Street that see trends continuing indefinitely on their current trajectories, I believe that television advertising revenues will recover in the near future, and that [Young] is well-positioned to take advantage of this recovery," he said in a statement.

"Historically, advertising expenditures are among the first to be cut at the start of a recession. They are also among the first to return when the economy begins its recovery," he added.

In addition to KRON, Young's portfolio includes ABC stations in Nashville, Richmond, Va., and Green Bay, Wis., as well as CBS affiliates in Lansing, Mich. and Sioux Falls, S.D., with reach throughout the Dakotas. The Richmond, Green Bay and Lansing stations could benefit from significant spending by the presidential candidates this fall, given their key locations in swing states.