Data Centre


Slowmo Violin train crash still sliding down the tracks

How long before it goes off the rails?

By Chris Mellor


Comment Violin Memory’s stock is slowmo crashing, and is now down to $0.35; it was $0.65 on October 11.

This values the company at just $8.85 million. The firm’s market capitalization was $20.24m on September 26, $31.3m in early May, and $76.5m in February – there has been a decline of around 88 per cent in value since then.

Violin has received the predicted NYSE delisting threat letter due to its share price being lower than a dollar for more than 30 days. The obvious answer is a second reverse stock split following the one in June, which was instituted to fix the exact same problem.

That problem surfaced in December 2015, when the stock price went under $1.00 on Dec 3 and stayed at less than a dollar – apart from brief excursions on Dec 23, 24 and 29 – into January, with the first delisting letter being sent on January 8 this year.

Here we are again, and it’s hard to see what Violin can do except have another 4:1 or greater reverse stock split to get the price back up above a dollar. The last one lasted for just four months before the second delisting letter came. How long would a second reverse split last?

We’re looking at the current (third fiscal 2017) quarter’s results being announced in early December. If there is a sequential decline from last quarter’s $7.5m revenues, then that might, just might, be a no turning back point. ®

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