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Reverse Stock Splits Are Among Astra's Plans To Avoid Delisting From Nasdaq

March 17, 2023
minute read

In an effort to prevent its stock from being delisted from Nasdaq as a result of delisting efforts from the Nasdaq, aerospace engine manufacturer, and rocket builder Astra announced a plan on Thursday.

An exchange-imposed deadline of April 4 is rapidly approaching, and Astra's stock has not yet risen above the $1 a share level that the stock needs to be above in order to remain listed on the exchange, the company announced Thursday. Astra filed a plan earlier this month seeking a 180-day extension of its listing deadline.

In the event that the appeal is successful, Astra will have until Oct. 1 to get its shares over $1 for at least 10 consecutive business days in order to qualify for the cash offer.

“As a result of our discussions with Nasdaq representatives, we are confident that we will receive feedback about our application on or around April 5, 2023, and we are unaware of any reasons why our application would be denied.” According to Astra's Chief Financial Officer Axel Martinez, “we have no reason to expect that our application won't be approved.”

Additionally, the Astra plan also includes the possibility of utilizing a reverse stock split that would allow it to once again comply with Nasdaq's listing standards in order to regain compliance. Due to the fact that it does not dilute the stock and does not change the valuation of the company, a reverse split does not affect the fundamentals and fundamentals of the company in any way. However, it would lift the stock price as shares would be combined.

In general, reverse splits can be evaluated by either looking at them as a sign of a company in distress or an attempt by the company to "artificially" boost its stock price or as a way for a viable company with an underperforming stock price to continue to operate on a public exchange. For example, if one of the stocks were reverse split, such as one for ten, then that stock would become $30 per share, as opposed to $3 per share in the case of a forward split.

The Nasdaq listing is important to Astra, and the company intends to maintain its Nasdaq listing for as long as possible.

A report on the company's fourth-quarter results is expected after the close of the market on March 30.

Cathy Hills
Associate Editor
Eric Ng
John Liu
Editorial Board
Bryan Curtis
Adan Harris
Managing Editor
Cathy Hills
Associate Editor

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