Due to its underperforming stock prices, the New York Stock Exchange (NYSE) has issued a noncompliance letter to SOS Limited, a blockchain-based service solutions provider.
The trading price of its American depositary shares (ADSs) has fallen below $1 for a consecutive 30-trading-day period.
To avoid suspension and delisting from the NYSE, SOS must restore its share price and average share price to $1 within six months.
No imminent effect on shareholders
In an official statement, SOS explained the compliance process:
“The company can regain compliance at any time during the six-month cure period if, on the last trading day of any calendar month during the cure period, the company has a closing share price of at least $1 and an average closing share price of at least $1 over the 30 trading-day period ending on the last trading day of that month.”
The noncompliance notice has a limited effect on listing the company’s ADSs. They will remain listed and traded on the NYSE during the six-month cure period, provided that the other listing requirements of the NYSE are met.
Decrease in stock value
Suppose the end of the six-month cure period does not result in a $1 closing share price on the last trading day of the cure period and a $1 average closing share price over the 30 days ending on the previous trading day of the cure period. In that case, the NYSE will initiate suspension and delisting procedures.
In pre-market trading on Nasdaq, the company’s share price decreased by 4.13% to $0.7. As illustrated in the chart above, SOS stock prices reached $1 on May 22 and have been trading below the $1 threshold ever since.
In March, the NYSE had threatened to delist Bakkt, a crypto custody and trading platform, if its average closing share price did not rise above $1.
Bakkt stated that the NYSE informed it that its share price had averaged less than $1 at the end of the previous 30-day trading period, violating the stock exchange’s listing regulations.
