NEW YORK - Selina Hospitality PLC (NASDAQ: SLNA), a hospitality brand targeting younger travelers, announced today its intention to appeal a delisting notice from the Nasdaq Stock Market. The company received the notice on April 17, 2024, due to its securities trading below the minimum bid price of $0.10 for ten consecutive days, violating Nasdaq's Low Priced Stocks Rule.
The company, which has been non-compliant with Nasdaq's Minimum Bid Price Rule since September 8, 2023, was previously notified that its stock price had fallen below $1.00 for 30 consecutive business days. Selina was granted an additional 180 days, until September 3, 2024, to meet the minimum bid price requirement after transferring to the Nasdaq Capital Market.
A hearing request with Nasdaq's Hearings Panel will temporarily stay the suspension of Selina's securities and delay the filing of the Form 25-NSE pending the Panel's decision. The hearing is expected to occur within 45 days following the company's request.
To address the issue, Selina is considering a 1:30 reverse stock split, which was approved by shareholders on March 26, 2024. This move is intended to increase the per-share trading price of the company's common stock to comply with the Nasdaq listing requirements.
Selina Hospitality, founded in 2014, operates properties designed in partnership with local artists and creators, offering a mix of accommodations, coworking spaces, and cultural experiences. The company operates in 24 countries and aims to cater to the lifestyle of nomadic travelers.
The information regarding the delisting notice and the company's plans to appeal and potentially execute a reverse stock split was based on a press release statement issued by Selina Hospitality PLC.
InvestingPro Insights
Selina Hospitality PLC (NASDAQ: SLNA) is currently grappling with challenges beyond its Nasdaq listing status. According to InvestingPro data, the company's market capitalization stands at a modest $21.44 million, reflecting investor concerns over its financial health. With a revenue of $204.19 million in the last twelve months as of Q2 2023, the company has seen a notable revenue growth of 42.36%. Despite this increase in revenue, Selina's gross profit margin remains low at 11.47%, underscoring the company's difficulty in converting sales into actual profit.
InvestingPro Tips highlight several critical issues facing Selina. The company is operating with a significant debt burden and is quickly burning through cash, which could explain the aggressive liquidity measures such as the proposed reverse stock split. The stock's high price volatility and poor performance over the last month, with a staggering 70.56% drop, are indicative of investor sentiment and market reactions to Selina's financial position. In addition, Selina's short-term obligations exceed its liquid assets, raising concerns about its ability to meet immediate financial liabilities.
For investors and potential shareholders, these insights from InvestingPro suggest caution. Selina's financial struggles are evident in its weak gross profit margins and the fact that it has not been profitable over the last twelve months. In light of these challenges, the company's decision to appeal the Nasdaq delisting notice and consider a reverse stock split seems to be a strategic move to regain compliance and investor confidence.
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