Sunrise plays defense as share price hits new low
The largest U.S. assisted living chain on Wednesday changed its rules governing the issuance of preferred shares. Previously, if a buyer purchased 20% of the shares of Sunrise, the company could issue more stock, thereby diluting the value of the shares and making it more difficult to gain a majority stake. Now, the board has lowered that threshold to 10%. Analysts say they are unsure if there are any buyers in the market, given the current economic downturn, but Sunrise's actions indicate they are playing defense all the same, according to The Washington Post.
The embattled senior living provider has experienced a rocky few months: It narrowly avoided a delisting from the New York Stock Exchange in March; founder Paul Klaassen stepped down from his post as his post as CEO; and the company this month reported third quarter losses of nearly $70 million—as much as it lost in the entire 2007 fiscal year. Meanwhile, the company has been recovering from earnings restatements and investigations into its accounting practices.