FuelCell Energy Inc (NASDAQ: FCEL) is having a strong start to the trading session this morning, trading on gains of more than 4% early on. The gains may come as a surprise considering that the only news issued by the company was an SEC filing announcing a listing requirement deficiency letter from the Nasdaq. Here’s what’s happening:
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FCEL Stock Gains After Announcing Nasdaq Listing Requirement Deficiency Letter
In an SEC filing issued early this morning, FuelCell Energy said that it received a letter from The Nasdaq Stock Market on July 18, 2019. In the letter, the Nasdaq informed the company that is is not in compliance with continued listing requirements.
In particular, the bid price of FCEL is too low. The Nasdaq requires that all listed companies maintain a minimum bid price of $1.00 per share. Becuase the stock has fallen below this key threshold for a period of 30 consecutive business days, the company is out of compliance.
Nonetheless, there are no immedicate actions that are taken by the Nasdaq during these types of cases. Instead, the exchange provides companies with a grace period of 180 calendar days, which it has provided to FCEL.
As such, by January 14, 2020, the company’s stock must have traded at or above a bid price of $1.00 per share for ten consecutive days. Once this happens, the Nasdaq will provide the company with written confirmation that it has regained compliance with the minimum price rule.
In the filing, FuelCell Energy said that it is in compliance with all other listing requirements set forth by the Nasdaq. Moreover, the company said that it has notified the Nasdaq of its intentions to remedy the deficiency.
Why The Stock Is Up
FCEL was experiencing strong early gains in the market this morning. These gains are likely tied to recent news of its relaunch of the sub-MW distributed generation solution to the European Market.
The solutions, known as the SureSource 250 and the SureSource 400 fuell cell systems, are manufactured in the United States and assembled in Europe. The hope is that this relaunch will lead to strong revenue growth, leading the stock up.
In a statement, Jennifer Arasimowics, Interim President and CEO at FCEL, had the following to offer:
The superior electrical efficiency, ultra-low criteria pollution emissions (NOx, SOx, PM) and low noise profile compared with engines and turbines make the SureSource sub-MW systems an ideal technology for commercial and retail sectors in Europe. We are excited to expand our presence and use of fuel cell solutions in Germany, Italy, United Kingdom, Benelux, France and Spain distributed power generation markets.
Nonetheless, the early gains are starting to disappear as a result of the Nasdaq listing deficiency news. So, if you’re going to play this stock, make sure to do so with caution.
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