Delisting averted by company's backers

May 27, 2008 7:00 PM

by Ray Poirier | With its stock trading under the required $1 level, Youbet.com (UBET) was warned by officials at Nasdaq that the shares would be delisted if the price didnít improve.

UBET shares had traded under $1 each for 30 consecutive trading days when the warning was issued on March 31. The company was given six months to come back into compliance.

Some observers suggested the company would use the reverse split strategy, that is, issue one share for every 10 outstanding. But, the companyís backers came up with one better. They dug deep into their own pockets to buy shares on the open market, thus boosting their value.

Newly appointed CEO Michael Brodsky bought 1.39 million shares at an average price of $1.63 each through a company that he manages; Jack Liebau, longtime racing executive and a member of Youbet.comís board, bought 120,000 shares at $1.40 each, and another board member, Mike Sands, bought 22,500 shares at $1.36 each.