Dive Brief:
- Online retailer Boxed has received a warning from the New York Stock Exchange (NYSE) that it is not in compliance with the exchange’s listing requirements because the company’s average market capitalization during a recent 30-day period was below $50 million, according to a Friday press release.
- The notice follows a warning Boxed, which specializes in bulk-sized pantry goods, received from the NYSE in mid-October because its stock price had been less than $1 for 30 trading days in a row, also putting it out of compliance with the exchange’s standards.
- Boxed stock has been under mounting pressure in recent months as the company has reported declining revenue and continued to lose money.
Dive Insight:
While the notices Boxed has received from the NYSE do not mean the company is in imminent danger of being delisted from the stock exchange, they are a stark reflection of the uphill battle the e-retailer faces as it tries to regain faith from investors.
Boxed said it plans to notify the NYSE how it intends to boost its market capitalization above the $50 million threshold by Dec. 8, noting that it would have 18 months from the date it received the warning to achieve that goal, assuming its plan passes muster with the exchange.
But to get back into compliance with the NYSE’s requirements, the company also needs to bring its average stock price above $1 for at least one calendar month by early next year — something that would require a reversal of fortune for Boxed in relatively short order.
Investors have been hammering Box since May, when the value of its shares began dropping precipitously. The company’s stock, which began trading on the NYSE on Dec. 9 at $8.90 per share and closed that day at $11.93, slipped below $10 on May 19, kicking off a sustained, multi-month decline. Boxed’s shares last closed above the $1 mark on Sept. 21 and were at 47 cents at the close of trading on Monday.
Boxed has seen its market value collapse even as it has tried to cast its results and prospects optimistically. The company, which operates as an online retailer in addition to providing e-commerce software to other companies, earlier this month reported a net loss of $26.4 million for the third quarter, compared with $5.9 million in for the same period in 2021.
Speaking during an earnings call on Nov. 9, Boxed Chief Financial Officer Mark Zimowski urged investors to view the company’s results for the third quarter in the context of its performance earlier in the year as well as on a year-over-year basis. Boxed reported a net loss of $31.8 million for the second quarter, above the loss it posted in its most recent quarterly period.
“We are pleased with our financial and operating results this quarter and they are a testament to the enterprise-wide buy-in to our sharpened strategy and the incredible efforts displayed by our team members,” Zimowski said during the earnings call.
In March, when Boxed reported its first earnings as a publicly traded company, the company laid out an optimistic forecast for its business-to-business operations and proprietary technology base. But in a sign that the company was headed for a tough year, Boxed said at the time that the $38.9 million net loss it posted in the fourth quarter of 2021 was five times the level it recorded during that period during the prior year.
In addition to its software and retail business, Boxed also runs a fresh grocery delivery business in the New York City area.
