Exela Technologies (NASDAQ:XELA), Inc., a business services provider, is facing delisting from the Nasdaq Stock Market after failing to meet the exchange's minimum market value requirement. The company was notified on Wednesday that its common stock will be suspended from trading at the market open on Saturday, November 8, 2024.
The Nasdaq Hearings Panel determined the action following Exela's non-compliance with the Nasdaq Listing Rule 5550(b)(2), which requires a minimum Market Value of Listed Securities (MVLS) of $35 million. The company's MVLS had been below this threshold for 30 consecutive business days. Exela was unable to meet any alternative compliance standards as well.
Despite efforts to regain compliance, including a compliance plan presented by senior management and advisors to the Panel on July 2, 2024, Exela did not meet the extended deadline of November 1, 2024. As a result, the Nasdaq will file a Form 25 with the SEC to formalize the delisting after the appeal period ends.
Trading of Exela's common stock, under the ticker symbol "XELA," is expected to move to the OTC Markets system starting November 8. The company has until November 22, 2024, to request a review of this decision by the Nasdaq Listing and Hearing Review Council. The Council also has the authority to initiate a review within 45 days of the decision.
Exela Technologies, originally known as Quinpario Acquisition Corp. 2, is incorporated in Delaware and has its principal executive offices in Irving, Texas. This news is based on a recent SEC filing by the company.
In other recent news, Exela Technologies reported a year-over-year revenue decline of 5.4% to $258.8 million in Q1 2024, partially due to the sale of its high-speed scanner business and the loss of a significant contract.
However, the company saw a substantial reduction in net loss, standing at $25.6 million, a $20 million improvement from the previous year, primarily due to lower interest and debt expenses. Adjusted EBITDA was reported at $12.9 million.
Another major update from Exela Technologies involves the departure of two board members, Marc A. Beilinson, and Sharon Chadha, confirmed to be unrelated to any disagreements with the company's operations, policies, or practices, leaving the future impact on the company's governance and strategic direction to be seen.
In addition, Exela Technologies announced the retirement of its Special Voting Preferred Stock, a move aimed at streamlining its capital structure, with the retired shares returning to the status of authorized and unissued shares of preferred stock.
These are recent developments that have been unfolding at Exela Technologies.
InvestingPro Insights
Recent data from InvestingPro sheds further light on Exela Technologies' financial situation, providing context to the company's delisting from Nasdaq. As of the last twelve months ending Q2 2024, Exela reported revenue of $1.02 billion, with a concerning revenue growth decline of 5.15%. This negative growth trend is further emphasized by a 10% quarterly revenue decline in Q2 2024.
The company's financial health appears precarious, with InvestingPro Tips highlighting that Exela's short-term obligations exceed its liquid assets, and the company has not been profitable over the last twelve months. These factors likely contributed to the company's inability to meet Nasdaq's minimum market value requirement.
Exela's stock performance has been notably poor, with InvestingPro data showing a year-to-date price total return of -41.07% as of the latest available data. This aligns with another InvestingPro Tip indicating that the stock price has performed poorly over the last decade.
For investors seeking more comprehensive analysis, InvestingPro offers 7 additional tips for Exela Technologies, providing a deeper understanding of the company's financial position and market performance.
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