Yesterday, shares of Invitae (NYSE:NVTA) stock plummeted lower by over 75% after The Wall Street Journal reported that the genetic testing services company was preparing for bankruptcy. Invitae has hired advisors Kirkland & Ellis, Moelis & Company, and FTI Consulting to figure out what to do with its $1.5 billion of debt amid a possible bankruptcy filing.
This morning, the New York Stock Exchange (NYSE) announced that it would begin the process of delisting NVTA stock due to its “abnormally low” price. Trading of the stock was also suspended.
“The Company has a right to a review of this determination by a Committee of the Board of Directors of the Exchange,” said the NYSE. “The NYSE will apply to the Securities and Exchange Commission to delist the Company’s common stock upon completion of all applicable procedures, including any appeal by the Company of the NYSE Regulation staff’s decision.”
NYSE Begins the Process of Delisting NVTA Stock
In September, the NYSE notified Invitae that it was in noncompliance with its continued listing standards. This was due to its shares having an average closing price below $1 over a consecutive 30-day trading period.
Backed by SoftBank (OTCMKTS:SFTBY), Invitae once traded at a market capitalization as high as $7 billion while its shares reached $50 a piece. Now, shares of NVTA are below 10 cents. This puts NVTA stock well within penny stock territory.
The biotechnology company was also a favorite of Cathie Wood’s Ark Invest. According to Cathie’s Ark, Ark still owns 26.54 million shares of NVTA. Yesterday, the fund manager sold 240,941 shares through the ARK Innovation (NYSEMKT:ARKK) and ARK Genomic Revolution (BATS:ARKG) exchange-traded funds (ETFs).
A November Warning and Rising Losses
Meanwhile, Invitae issued a cautious warning last November, stating that it had formed a special committee in order to improve its capital structure. Invitae added that it was exploring several options to improve its balance sheet, such as raising equity capital, selling assets and reducing capital expenditures.
During the third quarter, Invitae reported a GAAP EPS loss of $3.42 compared to a loss of $1.27 a year ago. The company has failed to achieve profitability since its inception in 2013.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Getting Scammed
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.
