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Slowmo Violin train crash still sliding down the tracks

How long before it goes off the rails?

By Chris Mellor

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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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