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Be the first with the news that moves the market- Molybdenum miner, General Moly Inc (TSX:GMO) has proposed a reverse stock split to raise its share price on the American NYSE.
- The company is required to raise its share price above 20 cents to remain listing, according to NYSE regulations
- A reverse stock split reduces the number of issued and outstanding shares, therefore increasing each share’s individual price
- The company cited low molybdenum prices and COVID-19’s economic impact as the source of its poor market performance
- General Moly Inc (GMO) remained steady, with shares trading for C$0.22
Molybdenum miner, General Moly Inc (TSX:GMO) risks removal from the New York Stock Exchange, after the company failed to raise its share price to 20 cents.
The company received a deficiency letter from the exchange last September. The company was required to raise its share price to the 20-cent-a-share minimum, stipulated by the exchange.
As of yesterday, General Moly has failed to comply with these requirements. At the time, the company’s share price was just 16 cents.
General Moly was unable to boost its value and cites the recent COVID-19 related market volatility as a contributing factor.
CEO Bruce D. Hansen outlined a few of the challenges facing the company.
“These are challenging times for us all as global citizens in a pandemic.
“The moly price has weakened in recent days to below $10 per pound but is still above $9 per pound, while our stock price, which was over 20 cents largely through February, has also declined,” he said.
To remain listing, the company is seeking shareholder approval for a reverse stock split.
A reverse stock split exchanges the current number of shares for a lower number but retains the net value of the combined shares. By doing this, each individual share’s price is raised.
This will artificially raise the value to meet the exchange’s requirements and the company can continue listing.
While the company awaits shareholder approval, General Moly’s NYSE stocks will remain listing.
If the shareholders reject the reverse stock split, then the company will likely be delisted. General Moly was quick to point out that issues with the exchange do not affect the companies on going mining operations.
Furthermore, The company stated that, if they are delisted, they will seek alternative listing options.
General Moly Inc (GMO) remained steady, with shares trading for C$0.22 at 2:32pm EST.
