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ZEPHYR COVE, Nev. - VirnetX Holding Corporation (NYSE: VHC), an Internet security software and technology firm, disclosed on Wednesday that it has been notified by the New York Stock Exchange (NYSE) of non-compliance with market capitalization and shareholders' equity requirements. The company's market value and stockholders' equity both fell below the NYSE's minimum threshold of $50 million over a recent 30-day trading period.
The notice, dated August 28, 2024, does not immediately affect the trading of VirnetX's common stock nor does it impact the company's business operations or SEC reporting obligations. VirnetX plans to submit a proposal within 45 days outlining actions to regain compliance with the NYSE's listing standards. If the NYSE approves the plan, VirnetX's stock will remain listed during an 18-month period provided the company adheres to other listing criteria and demonstrates progress.
VirnetX specializes in Zero Trust Network Access (ZTNA) based secure network communications with patented technology. Its products aim to facilitate secure real-time communication for enterprise applications and services regardless of device or location.
The company has warned that forward-looking statements in the press release, including those regarding its ability to develop a compliant plan and the NYSE's acceptance of such plan, are subject to risks and uncertainties. These statements are based on current expectations and involve risks that may cause actual results to differ materially from those anticipated. The company has no obligation to update any forward-looking statements unless required by law.
This news article is based on a press release statement from VirnetX Holding Corporation.
InvestingPro Insights
As VirnetX Holding Corporation (NYSE: VHC) faces the challenge of complying with NYSE's market capitalization and shareholders' equity requirements, a closer look at the company's financial health through InvestingPro data offers insights into its current standing. With a market capitalization of $26.74 million, VirnetX is currently under the NYSE's minimum threshold. This figure reflects the company's total market value as of the last trading period, emphasizing the need for a robust plan to regain compliance.
VirnetX's Price / Book multiple stands at 0.55 as of the last twelve months, which suggests that the stock is trading at a low valuation relative to the company's book value. This metric is often used by investors to gauge whether a stock is undervalued. However, with a negative P/E ratio of -1.33, it indicates that VirnetX is not currently profitable, a factor that might contribute to the market's valuation of the company.
InvestingPro Tips highlight several critical elements of VirnetX's financial situation. The company holds more cash than debt, which is a positive sign of liquidity. Additionally, it has liquid assets that exceed its short-term obligations, suggesting a solid short-term financial position. Nevertheless, analysts anticipate a sales decline in the current year, and the valuation implies a poor free cash flow yield, which could be concerning for long-term financial stability.
For investors and stakeholders considering the future of VirnetX, these InvestingPro Tips and data points provide a clearer picture of the company's financial health and market position. To explore more in-depth analysis and additional tips, readers can visit InvestingPro's dedicated page for VirnetX at https://www.investing.com/pro/VHC, where 10 more tips are available, offering a comprehensive view of the company's prospects and investment potential.
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