Circuit City Stock Gets Warning, Closes 155 Stores, Lays Off Thousands [Layoff Watch/Rumor]
Circuit City could be the next major retailer to say bye, bye. First a "below criteria" warning from the NYSE for their $0.26 per share stock price, and 155 stores closing, with some BS rules for employees affected by this. [Previous Circuit City posts.]
CC's stock is so low, that it could be delisted from the NYSE. Currently the 5 Year, 3 Year, 1 Year, YTD and 6 month return are between -93.81% and -98.54%, with the stock down 13.33% to $0.26 per share on close last Friday. The beginning of October saw the stock at $0.82 per share. Unfortunately, in addition to major stockholder losses, this also means that they are now on a "probation" of types with the New York Stock Exchange.
The NYSE requires any company's minimum average to be at a minimum of $1 per share for the 30 previous days. Because of this "below criteria" of their stock performance, Circuit City was notified Oct 24 by the NYSE that its stock listing price is so low it's on the verge of being delisted. CC has six months to get the stock back to par. As long as the average 30-day closing price is more than $1 during the next six months, it can stay listed on the NYSE.
Circuit City has 10 days to respond to the NYSE that it plans to get its stock back above $1. In the meantime, the company's CC ticker symbol will be followed by a ".BC" to show it' below continued listing standards.
On Oct. 20th, the Wall Street Journal reported that Circuit City was considering closing at least 150 stores and cutting thousands of jobs.
On Google Finance boards a person posted "In the e-mail from our SD, it says this is NOT a holiday kick off meeting. It is the result of a SD only conference call that happened earlier today." This is in regards to a Sunday morning meeting at 9 AM company wide for CC employees.
Now, it is rumored that CC is going to be closing 155 stores and withdrawing from 12 markets by Dec. 31st. This is supposedly going to be announced tomorrow, Monday, at 8 AM. Also supposedly store employees were notified this morning, Sunday. (See letter left) Employees in certain departments, like car installation, and Firedog, will likely be out of a job within 48 hours.
The letter above, obtained by The Consumerist states, "Circuit City has not yet determined whether it will provide severance pay in connection with this layoff. You will be provided with further information at a later date. You will continue to be bound by the terms and provisions of the Circuit City Code of Business Ethics." [Probably, in other words, they can not take a job with Best Buy or another competitor for at least one year which is pretty commonplace.]
Also according to The Consumerist, a CC insider reports, "Liquidators will be coming in on Tuesday and the affected stores will be shut down. There is likely not going to be a severance package for us being affected by the layoffs but we were given the option to get a bonus based on how many hours we worked under the liquidation process. We are not allowed to transfer to other locations and have to wait out the liquidation process before we apply. So essentially, we will have to take a paycut, a position cut, and more than likely an hours cut if we want to still work for the company."
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