Waldencast, formerly known as Waldencast Acquisition Corp., is currently facing the risk of being delisted from the Nasdaq Capital Market due to noncompliance with SEC reporting rules. The company, which was founded by ex-L'Oréal executives Michel Brousset, Hind Sebti, and Felipe Dutra as a SPAC, received a delisting notice from Nasdaq on October 31.
The company is now planning to appeal this decision through a hearing which will temporarily halt the delisting process for 22 days. During this period, Waldencast intends to finalize its overdue 2022 Annual Report. Yet, the company acknowledges that there's no guarantee their requests for suspension and continued listing will be approved or that it can meet all of Nasdaq Capital Market requirements.
The shell company streamlined the traditional IPO process in July 2022, acquiring Obagi Skincare and enabling Milk Makeup to inherit its stock exchange listing. This move allowed investors to fund acquisitions without going through the time-consuming IPO process.
However, the violation of SEC reporting rules due to delayed periodic filings has put Waldencast in a precarious position. The outcome of their appeal and ability to comply with all Nasdaq Capital Market requirements will determine their future on the exchange.
InvestingPro Insights
Amidst the potential delisting, Waldencast's financial performance offers some bright spots. InvestingPro data shows that as of Q3 2023, the company has a market cap of 6820M USD and a P/E ratio of 15.21, which is relatively low considering its near-term earnings growth. The company's revenue growth rate also stood at 21.43% during the same period, indicating a robust financial performance despite the recent challenges.
In line with these metrics, InvestingPro Tips highlight that Waldencast has high earnings quality, with free cash flow exceeding net income. Management has also been aggressively buying back shares, a sign of confidence in the company's future. However, it's important to note that the stock has taken a big hit over the last week, and it's currently trading near its 52-week low.
InvestingPro offers additional tips and insights for those interested in further understanding Waldencast's financial trajectory. With such data at your fingertips, you can make more informed investment decisions.
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