Cenntro Electric Group (NASDAQ:CENN) is down by more than 15% today as its shares began trading on a 1-for-10 reverse stock split adjusted basis as of this morning. Cenntro enacted the reverse split in order to buoy its shares above the Nasdaq’s minimum price requirement of $1. Nasdaq has provided the company until Dec. 18 to regain compliance. Regaining compliance requires CENN to close at or above $1 for at least 10 consecutive trading days, but generally no more than 20 consecutive trading days. However, there are only seven trading days until Dec. 18, which includes today and Dec. 18.
The reverse split was initially planned for Dec. 1 but was pushed back due to the company waiting to hear back from the Depository Trust and Clearing Corporation (DTCC).
CENN Stock: Cenntro Begins Trading on a 1-for-10 Reverse Split Adjusted Basis
As a result of the reverse split, shares outstanding will decline to 30.44 million from 304.44 million. No fractional shares will be issued as part of the reverse split.
“Stockholders will be issued one whole share of common stock in exchange for any fractional interest that such stockholder would have otherwise received as a result of the reverse stock split. The par value of the Company’s common stock will remain unchanged after the reverse stock split,” said Cenntro.
Cenntro has struggled to reach the pivotal $1 price level for about a year now. On Dec. 22, 2022, Nasdaq informed the company that it was noncompliant due to its stock closing below $1 for 30 consecutive trading days. Cenntro was given 180 calendar days, or until June 22, 2023, to regain compliance.
CENN failed to regain compliance by June 22, which resulted in the company requesting an additional 180-calendar-day extension until Dec. 18. That request was accepted.
Now, there are only seven trading days until Dec. 18, putting the fate of CENN on the Nasdaq at risk. If it is unable to regain compliance by then, the company can request an appeal hearing in front of Nasdaq’s Hearing Panel.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.