Naked Brand Group Ltd (NASDAQ: NAKD) is making a run for the top in the market this morning, and for good reason. The company announced positive news with regard to its non-compliance with the Nasdaq minimum bid price rule, sending the stock up more than 30% early on. Here’s what’s going on:
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NAKD Stock Rockets On Nasdaq News
In a press release issued early this morning, Naked Brand Group said that it received a notice from the Listing Qualifications Department of the Nasdaq Stock Market. According to the notification, the company has been granted an additional 180-day period to regain compliance with the minimum bid price rule.
The minimum bid price rule stipulates that NAKD and all stocks listed on the Nasdaq Stock Market maintain a minimum price of $1.00 per share. For the company to regain compliance, it has until February 3, 2020 to display 10 consecutive trading days with a minimum bid price over the $1.00 threshold.
In the release, the company also said that it has appointed Kelvin Fitzalan to its Board of Directors. Mr. Fitzalan is a former tax professional who worked at PwC Australia. This brings the total number of board members to four, with three of them being independent members.
What’s Next For The Company
At the end of the day, NAKD has a bit of time to make this right. In order to be approved for the 180-day extension, the company needed to submit a plan to the Nasdaq, informing the Nasdaq of how it intends on remedying the situation.
Unfortunately, this plan is not available to the public, so we don’t know what’s included. However, historically, companies that are in the same position that Naked Brand Group is in tend to have to make a decision. Either move forward with a reverse stock split, or face delisting.
While the company is likely to do everything in its power to get its stock moving toward $1 per share naturally, it would be unreasonable to expect that a stock trading at under ten cents per share would climb this high over the course of just a few months.
As such, it’s likely that NAKD will be moving forward with a reverse split within the next five months or so, in an effort to regain complaince.
Nonetheless, the extension means that the stock will maintain its listing on the Nasdaq… for now. That’s great news, and investors are reacting in a positive way.
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