Out of Compliance: How Delisting Distracts From a Turnaround
December 10, 2019
A retailer’s poor sales can send shares spiraling down as investors lose confidence. If the stock price gets below a certain threshold (usually $1) for too long a time, the retailer gets another item for its to-do list — a notice from the stock exchange that the price needs to recover or they’re in danger of getting kicked off.
However it happens, dealing with a delisting notice is just one more headache for a company that is almost certainly already struggling, according to Alon Kapen, a partner at law firm Farrell Fritz, who heads its emerging companies and venture capital practice group and has helped companies climb back into the good graces of stock exchanges.
“All this is an enormous distraction to management at a time when they’re under enormous business pressure, when they’re shutting down stores and facing the realities of the retail industry,” he told Retail Dive in an interview.
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