By Staff
Move is latest tribulation for local boat company
By TED STRONG
Staff Writer
Fountain Powerboat Industries Inc. will be delisted from the New York Stock Exchange Alternext US stock exchange, said owner Reggie Fountain.
The Washington-based firm, which is the parent company of Fountain Powerboats, was under review by the exchange for violating two financial standards.
According to the exchange, one violation was that the company didn’t have enough money, and the second was that the shares of its stock being traded — added together — were not valuable enough.
Monday, the company was told that the exchange didn’t think Fountain could bolster the value of its stock, and that the stock’s combined value had continued to drop, violating a third standard by staying below $1 million for more than three straight months. As a result, officials said they would move to delist the stock.
Company officials opted not to appeal the move because they don’t think they can meet the exchange’s standards in the current economic climate, according to a filing with the Securities and Exchange Commission.
The NYSE Alternext US is the successor to the American Stock Exchange, better known as the Amex.
The company’s stock will now be traded on so-called pink slips, or over-the-counter rather than on an exchange. It won’t have to make as many public reports, Fountain said.
He said he thinks the move will actually make it easier for his company to raise capital because it will be closer to a private company.
The blow came at a time when Fountain has already had to lay off more than 100 workers.
Fountain blamed the current economic downturn on out sourcing productive jobs to other countries. And he compared his company favorably to bigger corporations seeking government help.
The company’s stock dropped more than 27 percent Friday to about 24 cents a share.
Fountain said he hopes that as spring approaches business will pick up, and his company will emerge from the slump stronger and perhaps with less competition.
Fountain’s recent spate of bad news began in June, when the company found out that the exchange wasn’t sure the company had enough money to stay in business and pay all of its bills. The exchange based its assumption on financial documents from the first quarter of 2008,
In November, the company heard the exchange was worried because the company’s traded stock was worth less than $2 million at the market price and the company had incurred losses in two of its last three years.
Fountain said he was unconcerned about either violation of exchange standards.
He pointed out that company concerns about the value of the traded stock didn’t count the 52 percent of the company’s stock that he holds but doesn’t sell.