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NYSE's ultimatum to Quiksilver: 6 months to recover the stock ́s value

By Angela Gonzalez-Rodriguez

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Business

Quiksilver, Inc. (ZQK), announced that on July 10, 2015, the company was notified by the New York Stock Exchange (NYSE) that their common stock is not in compliance with the NYSE’s continued listing standard that requires a minimum average closing price of 1.00 dollars per share over a period of 30 consecutive trading days.

With this scenario, the Californian surf apparel firm has been given an ultimatum by the New York stock exchange operator: it has six months to lift its stock´s value and to stick to the ongoing regulation.

Under the NYSE’s rules, the Company has a period of six months from the date of the NYSE notice to bring its 30-day average share price back above 1.00 dollars.

However, if the company determines to remedy the non-compliance by taking action that will require shareholder approval, such as a reverse stock split, Quiksilver must obtain shareholder approval of such action by no later than its next annual meeting, and implement such action promptly thereafter.

Quiksilver’s shares to continue trading over ultimatum’s period

During this period, Quiksilver’s common stock will continue to be traded on the NYSE, subject to the fashion retailer’s compliance with other NYSE listing requirements. The company will then notify the NYSE of its intent to cure this noncompliance, stresses the market operator.

Both Quiksilver and the NYSE have reassured the investors further explaining that this NYSE notification does not affect the company’s business operations or its Securities and Exchange Commission reporting requirements.

It is worth of remembering that Quiksilver has been struggling financially for many months. Quiksilver last reported its figures on June, 9. The company reported 0.22 dollars’ worth of earnings per share for the quarter, missing the analysts’ consensus estimate by 0.08 dollars. Besides, the retailer also failed to meet the market’s estimates revenue wise, as it reported 333 million dollars revenue for the quarter, compared to the consensus estimate of 341.24 million dollars.

Shares attract increasing short interest over June

Shares of Quiksilver (NYSE:ZQK) were the target of a significant growth in short interest during the month of June. As of June, 15, there was short interest totalling 35,243,368 shares, a growth of 18.6 percent from the May, 29 total of 29,724,848 shares, ‘MarketBeat’ reports. Approximately 29.5 percent of the company’s shares are sold short.

Quiksilver has a one year low of 0.51 dollars and a one year high of 3.63 dollars, giving the company a current market cap of 101.18 million dollars.

The earnings surprise factor should not be forgotten either as such a big one as Quiksilver’s (-21.43 percent difference between the company´s factual figures and those estimated by analysts covering the company) might easily turn into a sharp movement in the stock price.

Quite recently, Quiksilver, Inc. (NYSE:ZQK) reported quarterly earnings of -0.17 dollars for the quarter ending on April, 30, what implies a surprise factor of over negative 21 percent given that the actual reported number was -0.03 dollars away from the consensus estimates, recalls ‘Investor Newswire’. Likewise, the revenue surprise factor in per share was -6.538 dollars for the last quarter or -1.925 percent.

Looking ahead, brokerages covering the stock are currently expecting the firm to earn -0.17 dollars per share.

Quiksilver