Lee Enterprises, Post-Dispatch Parent Co., Could Be Delisted from NYSE

The stock for Lee Enterprises, the Iowa-based newspaper company that owns the St. Louis Post-Dispatch, has dropped to bargain-level prices -- as of July 1, it was trading at a mere 99 cents per share.

And that could have serious repercussions for the struggling Iowa-based newspaper chain. The New York Stock Exchange typically does not tolerate stocks that sell for cheaper than a dollar -- since even a small drop in their value can lead to a huge percentage loss on paper. (If the price drops 50 cents, says, that's a 50 percent drop in value -- making for market turmoil.)

The NYSE warned the company July 8 that if it doesn't make some changes, it'll be booted from the stock exchange after a six-month warning period. And, during that warning period, it will be forced to carry a "BC" indicator next to its listing -- meaning the company is below compliance.

Lee's stock troubles come in stark contrast to the heady pre-crash days of 2005, when the company agreed to pay $1.46 billion, or $64 per share, for the 14 papers in the Pulitzer family, including the Post-Dispatch.

But in retrospect, that looks like less a great deal than the beginning of the end. Lee is now saddled with roughly $1 billion in debt -- which comes due in April 2012. And shares have tumbled -- from $35 per share in 2007 to $2.97 last April to the embarrassing 30-day average share price of 99 cents recently cited by the NYSE. The company had announced plans to refinance its debt by selling junk bonds earlier this year, but it canceled the deal in May when it became clear there weren't enough buyers willing to invest.

What next? In a press release, Lee told its investors yesterday that it was "in substantive and productive discussions with key lenders about an extension of our credit agreement." The company said the process will take several months, but once the refinancing is resolved, it expects investor confidence to grow.

And while we would seldom use the word "confidence" to describe what's going on at Lee, for the sake of all the reporters and editors and salespeople over the Post-Dispatch, we really hope against hope they know what they're talking about.