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Purple Innovation, Inc. (NASDAQ:PRPL), a household furniture manufacturer with a market capitalization of $71 million, has been notified by the Nasdaq Stock Market that it is currently not in compliance with the exchange's minimum bid price requirement. The company's stock, currently trading at $0.67, has been below the $1.00 threshold for 30 consecutive business days as of April 4, 2025. According to InvestingPro analysis, the stock has declined nearly 66% over the past year, reflecting significant investor concerns.
Despite the warning, there is no immediate threat to the listing or trading of Purple Innovation's shares on the Nasdaq Global Select Market. The company has been given a 180-day period, until October 1, 2025, to address the issue and raise its closing bid price to at least $1.00 per share for a minimum of ten consecutive business days. InvestingPro data reveals concerning fundamentals, including negative EBITDA of -$21.4 million and a WEAK Financial Health Score, with 12 additional risk factors available to Pro subscribers.
If Purple Innovation fails to meet this requirement within the given timeframe, it may consider transferring to The Nasdaq Capital Market, which allows for an additional 180-day compliance period. To qualify for this option, the company must fulfill all other initial listing standards, except for the minimum bid price, and may need to execute a reverse stock split as a remedy. The company's high debt burden and rapid cash burn rate, as identified by InvestingPro's comprehensive analysis, may complicate its recovery efforts.
The company has expressed its intention to closely monitor its stock's bid price and to explore all possible measures to regain compliance. However, there is no guarantee that it will be successful in meeting the Nasdaq's minimum bid price rule or maintain compliance with other listing standards.
This development is based on the 8-K filing with the Securities and Exchange Commission made by Purple Innovation on April 7, 2025.
In other recent news, Purple Innovation reported its fourth-quarter 2024 financial results, revealing a mixed performance with net revenue declining by 11.6% year-over-year to $129 million. Despite the revenue miss, the company achieved positive adjusted EBITDA of $2.9 million, a significant improvement from a negative $9.8 million in the previous year. Gross margins increased by 970 basis points to 42.9%, showcasing strong operational improvements. KeyBanc analyst Bradley Thomas maintained an Overweight rating on Purple Innovation with a price target of $5.00, noting the company's focus on operational efficiency and strategic alternatives, including a potential sale. Meanwhile, Raymond (NSE:RYMD) James analyst Bobby Griffin upheld a Market Perform rating, citing uncertainty in the mattress industry's demand recovery. Purple Innovation is exploring strategic alternatives following unsolicited interest, which could lead to a sale, and plans to expand its wholesale presence in 2025. The company has also announced restructuring actions expected to yield $25-30 million in EBITDA savings, with $4 million realized in 2024.
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