Digex Inc., an Internet company in Laurel whose shares have fallen more than 99 percent from their all-time high, said yesterday that Nasdaq plans to delist its stock from the Nasdaq SmallCap Market because it has failed to get its stock price above the minimum $1 level.
The company said it is appealing Nasdaq's decision.
"We have requested a hearing to appeal the staff's determination," George Kerns, Digex president and chief executive officer, said in a statement. "Regardless of the outcome, we will continue with initiatives to further grow the company and ultimately meet the criteria. It is also important to note that this process and the outcome will not affect our day-to-day operations and does not change our previously announced exploration of strategic alternatives."
News that Digex's stock would be delisted was released after the close of trading. Shares - which hit a high of $152.46 in March 2000 - closed yesterday at 57 cents, down 7 cents.
Digex, which hosts corporate Web sites and e-mail, has had a turbulent year as the telecom and Internet sectors remain depressed.
Its majority investor is WorldCom Inc., the long-distance phone giant that filed for Chapter 11 bankruptcy protection amid one of the largest corporate accounting scandals in U.S. history.
With mounting losses, Digex has cut its staff to about 800, down from 1,400 roughly a year ago. The company posted a net loss of $37.2 million, or 58 cents per share, on revenue of $43.2 million for the third quarter.
Last month, the company said that it would explore a possible sale.
"We had announced that we are exploring strategic alternatives, and as that process progresses, that's something Nasdaq would probably take into consideration as they review our plan," said Tania Almond, assistant vice president of investor relations for Digex.
Digex will appeal Nasdaq's decision to delist its stock by presenting a plan to meet listing criteria, Almond said. Those criteria include a stock price above $1.
The company's stock was moved from the Nasdaq National Market to the SmallCap market in September after its shares dropped below $1 in April and remained there. Nasdaq had said the stock would be delisted if it didn't reach more than $1 a share by Dec. 4.
Digex expects its appeal hearing before the Nasdaq listing qualifications panel to occur within about 45 days. Its stock will trade on the SmallCap market until the panel makes a decision, the company said.