Troubled telecom carrier and IT service company, already in bankruptcy, loses spot on the NASDAQ stock exchange
Windstream Holdings, the financially troubled parent company of telecom carrier Windstream Services, is losing its spot on the technology-oriented NASDAQ stock exchange as a result of its bankruptcy and fallen share price.
The Lowdown: NASDAQ’s listing qualifications department served notice to Windstream Friday that it would lose its listing on the New York-based exchange on March 6. No reason was given for the delisting. In a filing to the Securities and Exchange Commission (SEC), Windstream said it would not appeal the delisting.
The Details: The delisting notice came almost simultaneously with Windstream clearing its first hurdle for going into bankruptcy. A federal bankruptcy court granted Windstream approval to operate normally while undergoing the Chapter 11 debt restructuring process.
While NASDAQ gave no reason for the delisting, such actions happen for one of two reasons: Either a company’s stock price falls under $1 per share or a company falls into bankruptcy. In the case of Windstream, the stock price is now trading well below $1 per share, and the company initiated bankruptcy proceedings following its loss of a major lawsuit with bondholders.
The Impact: The NASDAQ delisting will likely have little immediate impact on Windstream and its operations. As is the case with the stock of other delisted companies, Windstream’s will continue to trade over the counter, where there are fewer regulatory and compliance requirements. However, delisting often tarnishes a company’s reputation and makes it harder to sell stock and raise funding.
Background: Windstream filed for bankruptcy last week following a $315 million court ruling in favor of bondholder Aurelius Capital Management. The court ruled that Windstream violated the terms of its bond agreement, making Aurelius entitled to immediate full payment. The court ruling amounted to a default, which also entitled other bondholders and creditors — holding more than $5.8 billion in notes — to file for immediate payment. Windstream sought bankruptcy protection to restructure its debt; it also received $1 billion in credit from Citigroup.
Since court problems began , Windstream’s stock price fell from $3.37 on Feb. 4 to 37 cents on March 1.