Boxed Faces NYSE Delisting Threat as Stock Price Plummets

In a recent press release, online retailer Boxed received a warning from the New York Stock Exchange (NYSE) stating that it is not in compliance with the exchange’s listing requirements. The warning was issued due to Boxed’s average market capitalization falling below $50 million over a 30-day period. This comes after a previous warning in mid-October, where Boxed’s stock price had been below $1 for 30 consecutive trading days, also putting the company out of compliance with NYSE standards. These warnings indicate the challenges Boxed faces as it strives to regain investor confidence.

The Uphill Battle for Boxed

While the warnings from the NYSE do not immediately lead to delisting, they highlight the uphill battle Boxed must overcome to restore faith among investors. Boxed has outlined its plan to notify the NYSE about how it intends to boost its market capitalization above the $50 million threshold by December 8th. If the plan is approved, the company will have 18 months to achieve this goal. However, Boxed also needs to raise its average stock price above $1 for at least one calendar month by early next year to comply with NYSE requirements, which necessitates a quick reversal of fortune for the company.

Investors have been increasingly concerned about Boxed since May when the value of its shares began plummeting. Starting at $8.90 per share on its first day of trading on the NYSE in December, the stock slipped below $10 on May 19th, signaling a sustained decline. On September 21st, Boxed’s shares last closed above the $1 mark, and as of the latest trading session, the stock was valued at 47 cents. This significant decrease in market value has occurred alongside declining revenue and ongoing losses for Boxed.

Boxed’s Financial Challenges

Boxed, which operates as both an online retailer and provider of e-commerce software, reported a net loss of $26.4 million for the third quarter, compared to $5.9 million for the same period last year. Despite these financial challenges, Boxed’s Chief Financial Officer, Mark Zimowski, urged investors during an earnings call to view the company’s results in the context of its performance throughout the year and on a year-over-year basis. Zimowski emphasized the efforts made by Boxed’s team members and their commitment to the company’s sharpened strategy.

However, Boxed’s optimistic forecast for its business-to-business operations and proprietary technology base, announced during its first earnings report as a publicly traded company in March, has not materialized. The company’s net loss of $38.9 million in the fourth quarter of 2021 was five times higher than the previous year’s figures for the same period. These disappointing results have contributed to the erosion of Boxed’s market value.

The Fresh Grocery Delivery Business

In addition to its software and retail business, Boxed also operates a fresh grocery delivery business in the New York City area. While this segment of the company’s operations has not been explicitly mentioned in relation to the NYSE warnings, it’s worth noting that the challenges faced by Boxed extend beyond its core retail and technology offerings. The success or failure of Boxed’s fresh grocery delivery business could have implications for the overall health and prospects of the company.

Conclusion

The recent warnings from the NYSE serve as a wake-up call for Boxed, highlighting the need for immediate action to address its declining stock price and market capitalization. The company’s management will need to present a compelling plan to the NYSE to regain compliance with listing requirements. Additionally, Boxed must demonstrate a turnaround in financial performance and investor confidence to avoid the possibility of delisting. As Boxed navigates these challenges, the future of this once-promising online retailer hangs in the balance.

Additional Information:

  • Boxed’s declining stock price and market capitalization have prompted warnings from the NYSE.
  • The company must outline a plan to boost its market capitalization above $50 million to regain compliance.
  • Boxed also needs to raise its average stock price above $1 for at least one calendar month to satisfy NYSE requirements.
  • Boxed’s declining stock price comes amidst a period of declining revenue and ongoing losses.
  • The company’s fresh grocery delivery business in the New York City area could impact its overall prospects.

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