Following a year of trouble and turmoil, Youbet.com Inc. still has some distance to go before things start looking rosy again. Last year's legal troubles with California law enforcement officials might have been settled, but new problems arose when the New Jersey Racing Commission recently decided to take action against Internet signal suppliers like Youbet, TrackPower and winticket.com and sent cease and desist letters to the companies. An opinion letter from the state's attorney that companies that accepted Internet wagers from New Jersey bettors were in violation of state law instigated the move.
Such problems only exacerbate the very real financial problems that Youbet has been suffering of late. And the company, whose stock has been hovering around the $1 level since mid-November, was informed today by the Nasdaq that it faces delisting if it fails to raise its minimum bid price of at least $1 for 10 consecutive days prior to May 21, 2001. The market's listing maintenance standard requires that a company's common stock maintain a minimum bid price of $1 per share, something that the company has failed to accomplish. The last time Youbet's share price closed above the minimum was January 24.
Late November the company's cash-crunch crisis forced it to let go of 34 employees (about 29 percent of its total workforce). The move was necessary to conserve cash for Youbet to proceed with its "ongoing aggressive development and expansion of it core horseracing business," according to a news release.
At the time, CEO Robert Fell said, "we have take these necessary steps to be conservative in our operating expenditures while maximizing our resources for greater efficiency."
"In recognition of the status of the current financial markets, we need to conserve cash and optimize our resources to proceed effectively in our core operating business," he added.
One year ago, Youbet's share price hit its 52-week high of $5.63 and saw its share fall to its lowest price in December when it sold for $0.38.