Pitney to Delist Preference Stock - Analyst Blog
April 11 2013 - 2:28PM
Zacks
Pitney Bowes Inc. (PBI) recently announced its
plans to delist its $2.12 Convertible Preference Stock from the New
York Stock Exchange (the “NYSE”). The decision, which has already
been notified to the NYSE, is expected to become effective by Apr
22, 2013.
The primary reasons attributed for the delisting were low number
of shares outstanding and low daily trading volume. In such a
scenario the listing fees and compliance administration costs
appear to be burdensome for Pitney. Currently, the company has
23,928 shares of outstanding Preference Stock, significantly below
the minimum number of shares specified by NYSE.
Although the stocks might continue to be traded at some of the
over-the-counter markets, the company does not intend to relist it
with any other exchange as of now. This delisting will not pertain
to the terms of the stock in any way and will not affect the
dividend payments.
As a result of this delisting, Pitney might lose investors'
confidence, as it failed to meet the requirements of NYSE. This
will likely make institutional investors skeptical of the stock, as
individual investor will have access to less information about the
company.
In this regard it is also to be noted that recently, Pitney
announced a cash tender offer to purchase some of its Notes, with
an intension to sell new debt securities through an underwritten
public offering.
Currently, Pitney has $4 billion in its long-term debt. This in
turn demands a high interest payout. Additionally, the market for
mail processing equipment and mail services is shrinking
globally.
Although management is attempting to transform Pitney to a
cloud-based, service-oriented company, the results have not yet
been able to surpass the declining revenue. During the last few
quarters free cash flow was also impacted by higher working capital
requirements due to the timing of disbursements and huge capital
expenditure made during last few quarters.
Given its deteriorating cash flows, declining revenues from
continuing operations and aggressive capex plans, it makes sense
for PBI to cut down its debt as a part of its capital management
plan. The resultant extension of maturities and lower operating
cost would also support its cash balances.
Pitney currently has a Zacks Rank #3 (Hold),. Some other
companies in the industry that are worth looking into include
Lexmark International Inc. (LXK), Xerox
Corporation (XRX) and Symantec Corp. (
SYMC), each having a Zacks Rank #2 (Buy).
LEXMARK INTL (LXK): Free Stock Analysis Report
PITNEY BOWES IN (PBI): Free Stock Analysis Report
SYMANTEC CORP (SYMC): Free Stock Analysis Report
XEROX CORP (XRX): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Pitney Bowes (NYSE:PBI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Pitney Bowes (NYSE:PBI)
Historical Stock Chart
From Jul 2023 to Jul 2024