L.L. Knickerbocker in Danger of Delisting

By LESLIE EARNEST

Feb. 20, 1999 12 AM PT

TIMES STAFF WRITER

L.L. Knickerbocker Co., whose shares were once one of Wall Street’s hottest investments, said Friday it is in danger of being delisted by the Nasdaq National Market because its stock price has fallen below $1 a share.

The Lake Forest-based company, which sells collectible porcelain and vinyl dolls and teddy bears, said in a statement that it will “rigorously work to regain compliance.”

Knickerbocker’s stock has had a tumultuous past, rocketing in 1995 to $52 a share from $4 before a 5-for-1 stock split.

The run-up was not without controversy. Flamboyant stock broker and promoter Rafi M. Khan was accused in a lawsuit last July of manipulating the shares of Knickerbocker in 1995, helping fuel the spectacular gains.

The stock has had major price swings since then, but in recent months has been slumping. Indeed, over the last three months, the shares have closed at only $1 or above in two trading sessions. On Friday, the shares closed unchanged at 75 cents.

The shares hit a 52-week low of 44 cents Dec. 23. Last February, the stock traded as high as $6.56.

To avoid the delisting, the stock must close above the $1 minimum price for 10 consecutive sessions by March 30.

Knickerbocker is one of several companies feeling the pinch of tougher listing standards, including the $1 price minimum, established last year by Nasdaq.

Since Nasdaq tightened its rules, the number of delistings has more than doubled.

Earlier this month, stock of the Irvine-based Koo Koo Roo Enterprises Inc. was bounced for failing to meet one of the minimum requirements. That company’s stock was hovering below $1 a share.

Knickerbocker said it is in compliance with other market requirements and will request a hearing with Nasdaq officials if the stock remains below $1.

The company said it is considering a number of options to pump up the price, including selling some of its assets. It did not elaborate.

“We believe there is undue pressure on our stock,” Chief Executive Louis L. Knickerbocker said in the statement. “We remain firm in our belief that our stock is currently undervalued in relation to our balance sheet and our basic business.”

Company officials had no further comment Friday.

For the first nine months last year, Knickerbocker posted a loss of $4.1 million, compared with a $4.9-million loss for the same period the year before. Sales dropped to $40.6 million from $45.1 million.

The stock’s surge four years ago raised eyebrows at the time, but it was not until July that federal regulators filed the civil lawsuit detailing the alleged scheme to manipulate the price.

Specifically, regulators contended in the suit that Kahn acquired substantial control of the market for the stock, restricted the supply of available shares, then created demand by making misleading statements, including “wildly exaggerated earnings projections.”

The lawsuit, filed in the U.S. District Court in Los Angeles, is pending.

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Knocked Down

L.L. Knickerbocker Co., which sells collectibles and toy-related merchandise, is in danger of having its stock removed from the Nasdaq market. The company’s stock has fallen below the minimum price of $1 a share. Monthly closing prices:

1995

March $0.88

June 1.08

Sept. 7.13

Dec. 8.25

1996

March 8.00

June 11.75

Sept. 11.38

Dec. 6.38

1997

March 6.13