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Stock Market / Indianapolis Indians / Victory Field / Sports Business

Thinly traded Indians stock delisted by NASDAQ

June 4, 2014
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The Indianapolis Indians were recently delisted from the NASDAQ Pink Sheets, but team officials say it should have little to no impact on the AAA baseball team or its business operations.

It could, however, have a significant impact on Indians shareholders.

The Indians have "no relationship" with NASDAQ officials and made no payments to be listed on the Pink Sheets, said Bruce Schumacher, the team's vice president of corporate affairs.

"There just weren't very many transactions," he said of why the stock was delisted.

While publicly traded companies often get delisted for financial troubles or filing issues, that wasn't the case with the Indians, said Mark Foster, chief investment officer for Columbus-based Kirr Marbauch & Co.

"To be listed, a company must have a market maker submit an application to NASDAQ and agree to make a market in that stock," Foster said. "In cases like the Indians, the stock is so thinly traded, there isn't a willing market maker. "

The delisting certainly had nothing to do with the team's financial status or stock value. The Indians have been profitable for more than a quarter century and in recent years have churned out annual profit of about $1 million.

The few recent trades that have occurred have been in the $30,000 per share range, which would put the valuation of the team at about $22 million. Several analysts involved in minor league baseball think that valuation is low.

The impacts of the delisting on stock holders will vary. For one, "the delisting gives stock holders one less avenue to sell their stock," Foster said.

The delisting also could give a boost to the team's buyback program. For the better part of the last decade, the Indians have been offering to buy back any stock holders' shares. Those shares are then retired and the remaining shareholders then own a bigger percentage of the team.

The Indians are currently offering shareholders $30,814 per share via the team's buyback offer.

"When the stock is delisted and there are no market makers, it's tricky to determine the value of the stock," Foster said. "That's not a great scenario for shareholders.

"The delisting might make the team's buyback offer the best option to sell," he added.

That scenario in the long run could benefit those who decide to stay in the game.

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