Violin Memory (VMEM) is on the verge of a second threat to be delisted from the NYSE. This follows the company’s continued slump in share prices coupled with a decline in revenues. According to NYSE, Violin Memory has failed to earn revenues exceeding the minimum set by the stock exchange management board. The listing requirements state that every company listed on NYSE is supposed to have an average capitalization not less than $50 m over a 30 day period. Violin Memory has failed to meet this minimum requirement and has since been told of a possible delisting action. In a letter written by the NYSE management board and dated April 27th , Violin Memory was told to prepare for a possible delisting action should its average capitalization remain stagnant or below the average minimum.
Violin’s current average capitalization stands at $31.32 m and it has up to 45 days to go through the letter and draw up a plan to highlight its prospects of regaining compliance. The stock will only be listed for the next 18 months before the action to delist it may be put into effect. Management of the firm will hope that their plan gets approved by the NYSE.
It is going to be interesting to see how Violin will respond to the letter and how it will outmaneuver the situation. However, what is expected of the firm is for it to press towards producing better trading results in order to raise its share price along with its average market capitalization. There is no other feasible action that the company can take in order to keep its hopes alive.
In mid-January of this year, the NYSE issued a threat against Violin expressly indicating that the firm may be delisted from the NYSE following the fall of its stock price which remained on an average value of $1.00 over a period of 30 days. But, Violin had promised to take the price to greater heights, beyond the $1.00 mark which has been set by the NYSE. Several efforts have been made by Violin’s management to push the price of the shares up, but little has been realized so far. Since the 29th of December, last year, the firm’s share price has been staggering at $0.31 and may slump further if no viable efforts to revive it are implemented.
Despite the seriousness of the threats issued against the firm, there has been little change since the close of last year and during the first quarter of this year. Rumors suggest that increasing sales may not be helpful in raising the value of the firm’s share price. According to reports from certain sections of the general business community, the firm barely has any viable businesses left. Its sales and presales have all run out leaving the company with little to rely as it tries to cushion against the continued slump of its share prices. Meanwhile, its Germany staffers had parted ways with the company while their glass door reviews are in a total state of disarray.