Top Ships Inc (NASDAQ: TOPS) is having a relatively strong start to the trading session this morning after announcing that it has regained compliance with the NASDAQ. Of course, this means that the stock will not be delisted, leading to excitement among investors and sending the stock upward. However, there’s a reason that the stock is compliant and it’s not because investors have gained confidence. Today, we’ll talk about:
- The NASDAQ compliance news;
- what we’re seeing from the stock;
- risks to consider;
- and what we’ll be watching with regard to TOPS ahead.
TOPS Regains NASDAQ Compliance
As mentioned above, Top Ships is having a relatively strong start to the trading session in the pre-market hours this morning after announcing that it has regained compliance with NASDAQ listing requirements. Recently, the company was informed by the NASDAQ Capital Markets that it was out of compliance of the minimum bid price requirement, requiring listed companies to maintain a minimum bid price of $1 per share.
However, in a press release issued early this morning, TOPS announced that it has regained compliance with the NASDAQ minimum bid price rule, meaning that it will not be delisted. However, it’s important to keep in mind that the bid price increase wasn’t the result of investors gaining faith in the company. Instead, the company reverse split its way to compliance with a split that became effective on March 26, 2018. Ultimately, the 1-for-10 reverse split increased the price of shares ten fold, allowing TOPS to meet the requirement.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dabble in the market is that the news causes moves. In this particular case, the news seemed to be positive. While the company was in danger of being delisted from the NASDAQ, due to the reverse split, the danger is no longer there. So, excited investors are sending the stock skyward. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:23), TOPS is trading at $1.80 per share after a gain of $0.08 per share or 4.65% thus far today.
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Consider The Risks
Any time you make an investment, you’re taking on risk. However, if you invest in Top Ships, you’re likely taking a massive risk on. Just look at the history of the company. Throughout the past several years, the news feeds surrounding TOPS are riddled with dilutive offerings, declining prices, and reverse splits, all of which seems to be in the interest of management without the consideration of investor needs. While the company recently announced that it is changing its capital structure in an attempt to better align with investors, I’d want to see proof of this alignment before putting up my hard earned money!
What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on TOPS. In particular, we’re interested in following the company’s moves as it supposedly works to align its interests with investor interests. Nonetheless, if history is any indication, what we’ll be watching for is a clear path downward with wide swings in value between the massive declines. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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