Meta Materials (NASDAQ:MMAT) stock is falling lower after the company announced that it had regained compliance with Nasdaq’s minimum bid requirement of $1. Meta had previously scheduled a hearing in front of the Nasdaq Hearing Panel after Nasdaq sent it a delisting determination. This was due to MMAT stock having a closing bid price of 10 cents or less for 10 consecutive trading days. The hearing, which was set for March 21, has now been cancelled.
Now, Meta Materials is in full compliance with with all Nasdaq listing requirements. So, why aren’t shareholders reacting more positively?
First, the only reason that MMAT stock regained compliance is because the company enacted a 1-for-100 reverse stock split. This split became effective on Jan. 29. Reverse splits are generally not welcomed by shareholders and this one likely contributed to the 57% decline in MMAT so far this year.
MMAT Stock: Meta Regains Nasdaq Compliance
Another reason that Meta isn’t reacting positively today may be a hotter-than-expected consumer price index (CPI) update. During January, the CPI rose by 0.3% month-over-month and 3.1% year-over-year (YOY). Meanwhile, economists surveyed by Dow Jones had expected a monthly increase of 0.2% and a yearly increase of 2.9%. The surprise to the upside has affected the entire market, as both the S&P 500 and Nasdaq 100 are in the red today.
Meanwhile, the company disclosed its preliminary fourth-quarter results last month, showing growth on several fronts. For the quarter, revenue is expected to be $2.2 million, up by 55% compared to $1.4 million a year ago.
“A strong capital position involves reducing expenses, managing cash and seeking out opportunities to monetize non-core assets to our advantage,” said CEO and President Uzi Sasson.
Cost cutting has also been a focus for Meta, as total operating expenses are expected to be $16.1 million, an improvement from $24.8 million YOY. In addition, Meta provided a loss from operations estimate of approximately $14.9 million, an improvement from a loss of $24 million a year ago.
At the same time, Meta did not provide a net loss figure. The company also added that it expects to incur a non-cash impairment of long-term assets, which was not included in the preliminary results.
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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.
