Pixelworks secures Nasdaq listing extension

In a recent turn of events, Pixelworks (NASDAQ:PXLW), Inc. has been granted a 180-day extension by Nasdaq to meet the exchange’s minimum bid price requirement, according to a statement filed with the SEC on Monday. The semiconductor company, currently trading at $0.62 and considered undervalued according to InvestingPro Fair Value metrics, was previously notified of non-compliance due to its stock failing to maintain the required $1.00 minimum closing bid price over 30 consecutive business days. The stock has faced significant headwinds, declining 76% over the past year.

The compliance issue was first communicated to Pixelworks on September 11, 2024, when it received the Bid Price Deficiency Notice from Nasdaq. The company was initially given until today, March 10, 2025, to address the bid price shortfall. To tackle the issue, Pixelworks applied for a transfer of its listing from the Nasdaq Global Market to the Nasdaq Capital Market, which was approved on March 7, 2025. This move allows the company to benefit from the extended deadline of September 8, 2025, to regain compliance.

To achieve compliance, Pixelworks’ common stock needs to maintain a closing bid price of at least $1.00 per share for at least 10 consecutive business days before the September deadline. The company is actively monitoring its stock closing bid price and is considering various options to rectify the deficiency, including the possibility of a reverse stock split. While analyst price targets range from $1.50 to $2.00, InvestingPro data reveals the company faces challenges with negative EBITDA of $25.62 million, though it maintains more cash than debt on its balance sheet. However, there is no certainty that Pixelworks will be able to meet the Nasdaq’s requirement within the newly allotted timeframe or maintain compliance with the other listing standards of the Nasdaq Capital Market.

This development is crucial for Pixelworks as it strives to maintain its listing on the stock exchange, which is important for the visibility and liquidity of its shares. The company’s transfer to the Nasdaq Capital Market will be effective at the opening of business on Tuesday, March 11, 2025.

The information in this article is based on Pixelworks’ recent SEC filing.

In other recent news, Pixelworks Inc. reported its fourth-quarter 2024 earnings, revealing a net loss of $0.07 per share, which was better than the anticipated loss of $0.09 per share. However, the company’s revenue for the quarter was $9.1 million, falling short of the expected $9.83 million. Despite the revenue miss, Pixelworks improved its non-GAAP gross profit margin to 54.8%, a significant year-over-year increase of 1000 basis points. The company also announced a restructuring plan, including a 6% workforce reduction, to better align operating expenses with current revenue levels, expecting annualized savings of approximately $1.2 million.

Additionally, Pixelworks’ subsidiary in Shanghai will pay $0.5 million to terminated employees participating in the company’s employee stock ownership plan. In terms of future expectations, Pixelworks anticipates first-quarter 2025 revenue to range between $7 million and $8 million, with a non-GAAP gross margin of 49-51%. The company is focusing on its TrueCut Motion platform and mobile business to drive growth throughout 2025. Furthermore, Pixelworks is engaged in a strategic review process with Morgan Stanley (NYSE:MS) to explore potential ownership and collaboration structures for its Shanghai subsidiary. These recent developments reflect Pixelworks’ efforts to manage costs and adapt to market challenges.

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