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Market chaos makes pocket change out of restaurant stocks

NEW YORK There is another kind of dollar menu in town.

Seven restaurant companies in the Nation’s Restaurant News Stock Index — including such well-known names as Grill Concepts, Jamba and Cosi — have traded around the $1 mark throughout this month, showcasing both the industry’s tough times and the stock market’s volatility.

The dollar stock menu also includes Granite City Food & Brewery, Diedrich Coffee, Good Times Restaurants and NexCen Brands.

Among these companies, some suffered a slow downward spiral, like Jamba Inc., which saw its stock decrease steadily since this summer from quarter after quarter of negative news including drops in same-store sales and increased operating losses. Its stock has fallen from year-ago levels of between $6 and $7 and has closed under $1 each day so far this month. On Friday, Jamba's stock fell to 53 cents a share.

Others, like Marble Slab and MaggieMoo's parent NexCen Brands Inc., plunged in one shot from disclosures earlier this year that the company faced a liquidity crisis and would need to sell assets to survive. In May, its stock price fell from $2.53 — already off about 64 percent from year-ago levels — to 58 cents. It has not closed above $1 since then and closed at just 10 cents on Friday after falling to a new low of 9 cents in midday trading.

Having suffered a closing stock price below $1 for more than six months, Granite City Food & Brewery Ltd. this week received a notice of non-compliance from the Nasdaq exchange, where its stock trades. Nasdaq listings are required to trade above $1, and typically have 180 days to regain compliance. The exchange, however, has decided to suspend enforcement of its bid price and market value requirements through Jan. 16 of next year “in light of extraordinary market conditions.” Because of the change, Granite City will have until July 20, 2009, to regain compliance or face delisting, which typically means a demotion to the pink sheets. Granite City's stock closed at 64 cents a share on Friday.

Diedrich Coffee Inc. also received a notice this week from Nasdaq, but one that concerned the company’s minimum market value of publicly traded shares, which Nasdaq requires to total $5 million. Diedrich shares the same grace time as Granite City because of Nasdaq's decision to suspend enforcement of such rules. Earlier this month Diedrich also had received a warning about the exchange’s minimum stockholders’ equity requirement of $10 million.

Diedrich’s stock price fell below $1 on Oct. 20 and has remained there each day this week, closing Friday at 82 cents. Its annual high is $3.80 and its low is 58 cents.

The other companies on the dollar stock menu haven’t fared as poorly. Grill Concepts Inc., while down 77 percent for the year, has been as high as $1.94 this month and as low as 75 cents. It closed Friday at 92 cents per share. Good Times Restaurants Inc. is off 82 percent this year and has traded between $2.95 and 76 cents per share this month. It closed Friday at $1.05 per share. Shares of Cosi Inc. have fluctuated between $2.06 per share and 87 cents per share this month, and closed Friday at $1.05. The company’s stock has lost 57 percent of its value this year, and its 52-week high and low stock prices fall between $3.78 per share and 87 cents per share.

Track restaurant stocks in real time at NRN Market Monitor.

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