Blockbuster and 4Kids Entertainment have both received notices from the New York Stock Exchange that they may be delisted due to capitalization levels that are too low. 

Video chain Blockbuster, which has been shedding stores as it tries to battle the effects of Netflix, legal and illegal downloads, and the proliferation of DVD kiosks (see “Blockbuster Teetering”), warned recently that it may enter Chapter 11.  Its market capitalization is below the minimum $75 million requirement to be listed on the NYSE. 

Similarly 4Kids, which has been battered by losses relating to Chaotic, Lehman-related investments, and a lack of new hits (see “4Kids Takes $20M Chaotic Hit”), was also warned that its market capitalization was below the minimum required for listing on the NYSE.  The company is researching strategic alternatives (translation:  for sale). 

Both companies have time to correct the problem and maintain their listings, but without new capital, the only possibility is a news-driven improvement in share price.