Netlist, Inc. (NASDAQ: NLST) is having an overwhelmingly rough start to the trading session this morning, and for good reason. The company announced that due to its inability to regain compliance with NASDAQ listing rules, it will be moving to the OTCQX®. Of course, the news upset investors, sending the stock tumbling. Today, we’ll talk about:
- The news;
- what we’re seeing from NLST; and
- what we’ll be watching for with regard to the stock ahead.
NLST Dives As NASDAQ Boots The Stock
As mentioned above, Netlist is having a rough start to the trading session this morning after the company announced that it will be leaving The Nasdaq Capital Market. Effective September 27, 2018, NLST will no longer trade on the NASDAQ. In stead, the company will move to the OTCQX®.
The move comes amid compliance issues. the NASDAQ requires that listed stocks maintain a minimum bid price of $1.00. While the company submitted a plan to the NASDAQ in order to regain compliance, and that plan was accepted, it did not follow through. The company did everything outlined in the plan except for a reverse stock split that would have brought NLST to a bid price above $1.00 per share. Due to its inability to regain compliance, NLST will no longer trade on the NASDAQ.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of Netlist, the news was overwhelmingly negative. Due to the fact that the company will no longer trade on the NASDAQ, it no longer has the same access to capital as it did when it traded on the exchange. So, it comes as no surprise that upset investors are sending the stock tumbling down. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:11), NLST is trading at $0.44 per share after a loss of $0.21 per share or 32.42% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on NLST. In particular, we’re interested in following the story surrounding the company’s continued patent litigation with SK hynix as a positive ruling in this litigation could drive incredible value for shareholders. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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