Kaixin Holdings faces Nasdaq delisting over low share price

HANGZHOU, China - Kaixin Holdings (NASDAQ:KXIN), a prominent new energy vehicle manufacturer in China, is confronting delisting from the Nasdaq Capital Market after failing to meet the minimum bid price requirement. The Nasdaq Stock Market LLC issued a notice to the company on August 19, 2024, regarding non-compliance with Listing Rule 5810(c)(3)(A)(iii), after its securities maintained a closing bid price below $0.10 for ten consecutive trading days.

The company had previously been notified on February 1, 2024, of its non-compliance with the Nasdaq Listing Rule 5550(a)(2) due to its share price dropping below $1 over 30 consecutive business days. Kaixin was granted an initial 180-day period until July 30, 2024, to regain compliance, followed by an additional 180 days extending to January 27, 2025.

Following the recent delisting notice, Kaixin has requested an appeal hearing with a Nasdaq Hearings Panel, scheduled for October 3, 2024. This request has temporarily stayed the suspension of trading and the filing of the Form 25-NSE, which would officially remove Kaixin's securities from the Nasdaq listing.

In efforts to address the compliance issue, Kaixin is considering various options, including a reverse stock split subject to shareholder approval. An extraordinary general meeting of shareholders is set for October 1, 2024, to vote on the proposed reverse stock split, which would be implemented following the completion of necessary administrative procedures.

Kaixin Holdings is recognized for its comprehensive new energy vehicle offerings, including electric passenger and logistics vehicles. The company has expressed a commitment to innovation and sustainability in the automotive sector, aligning with global objectives for reduced carbon emissions and carbon neutrality.

The information in this article is based on a press release statement from Kaixin Holdings. The company's future plans and strategies are subject to a range of risks and uncertainties, and there is no assurance that the appeal or potential reverse stock split will result in regained compliance with Nasdaq's listing requirements.

In other recent news, Kaixin Holdings, a retail auto dealership group, has scheduled an Extraordinary General Meeting (EGM) for October 1, 2024, following significant changes in the company's structure and operations. The notice for this meeting was filed with the United States Securities and Exchange Commission in a Form 6-K. Shareholders of record will be eligible to vote on the matters to be presented at the EGM, with further details expected to be made available ahead of the meeting.

On another note, Kaixin Holdings has been granted an extension by Nasdaq to meet its minimum bid price requirement. The company now has until January 27, 2025, to demonstrate compliance with the rule requiring listed securities to maintain a minimum bid price of $1 per share. This decision came after Kaixin's failure to meet the minimum bid price requirement as of July 30, 2024.

If Kaixin's security's closing bid price reaches at least $1 per share for at least 10 consecutive business days during the 180-day extension period, Nasdaq will confirm compliance and close the matter. However, if Kaixin does not achieve the necessary bid price by the January 2025 deadline, Nasdaq will issue a written notification of delisting, which the company can appeal before a Hearings Panel. These are among the recent developments concerning Kaixin Holdings.

InvestingPro Insights

Kaixin Auto Holdings (NASDAQ:KXIN), while navigating the challenges of Nasdaq listing requirements, also presents a financial picture that warrants attention. According to InvestingPro data, the company's market capitalization stands at a modest $3.88 million, reflecting the market's current valuation of the firm. The Price / Book ratio as of the last twelve months ending Q4 2023 is notably low at 0.09, indicating that the stock is trading at a low valuation relative to the company's book value. This metric, coupled with a recent price close at $0.08, suggests that the market may be undervaluing the company's assets.

Furthermore, the company's revenue has experienced a significant decline, with a -61.93% change over the last twelve months as of Q4 2023. This sharp decrease in revenue growth is a critical factor for investors to consider when evaluating the company's performance and future prospects.

InvestingPro Tips also highlight that Kaixin is trading at a low revenue valuation multiple and has been quickly burning through cash. These factors, combined with the fact that the stock is currently trading near its 52-week low, suggest that investors are cautious about the company's financial health and future earnings potential.

For those considering an investment in Kaixin, additional insights are available on InvestingPro. The platform offers a comprehensive list of 17 InvestingPro Tips, which provide deeper analysis and could be instrumental in making an informed decision. For instance, the RSI indicates that the stock is in oversold territory, which could be of interest to potential investors looking for entry points. However, it is also important to note that the company suffers from weak gross profit margins and has short term obligations that exceed its liquid assets, adding layers of risk to the investment.

InvestingPro users can access these and other tips by visiting the dedicated page for Kaixin Holdings at https://www.investing.com/pro/KXIN, providing a valuable resource for those seeking to understand the full picture of the company's financial standing and market performance.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.