Mogo at risk of being delisted from Nasdaq for sub-$1 USD share price

The Vancouver FinTech startup has 180 days to get over $1 USD.

Vancouver-based FinTech startup Mogo has received a written letter from the Nasdaq indicating that its shares had closed below the minimum $1 USD requirement for continued listing on the exchange.

Mogo got the letter on Friday, wherein it was notified of its bid price deficiency for the last thirty consecutive business days. In accordance with Nasdaq’s listing rules, Mogo was provided with an initial period of 180 days, or until April 26, 2023, to regain compliance.

Mogo said its business operations are not affected by the bid price deficiency letter, with intentions to regain compliance with the listing rules.

If Mogo doesn’t get its share price to float above the $1 USD minimum, it may be eligible for an additional 180 days for its compliance period. If the company is still unable to resolve its bid price deficiency through the applicable compliance period and a reverse stock split, as suggested by Nasdaq, it will be issued a delisting letter.

Founded in 2003 by David Marshall Feller, Mogo offers high-interest loans, identity fraud protection mortgages, a Visa Prepaid Card, credit scores, and a crypto trading platform through its exchange partner Coinsquare. The startup first began trading on the Toronto Stock Exchange (TSX) in 2015 where it raised a $50 million IPO, then listed its common shares on the Nasdaq in 2018.

Mogo’s share price on Nasdaq has declined about 77 percent year-to-date (YTD), trading at $0.77 USD at press time. It hit its peak in March 2021, with a price point of $11.47 USD, and started hovering at $1 in June this year. Mogo has been consistently trading under the $1 minimum since mid-September.

On the TSX, Mogo’s share price at press time is $1.06 CAD and its trajectory on the Canadian exchange has been similar to that of the Nasdaq. It peaked at $14.35 CAD in March 2021 and has continued to fall since then amid the broader public tech company slump.

RELATED: Mogo Inc. affected by crypto market declines

According to Mogo, its business operations are not affected by the bid price deficiency letter from Nasdaq, and the company intends to regain compliance in accordance with listing rules.

Mogo’s potential Nasdaq delisting reflects the macroeconomic environment of crypto as the market and tech stock valuations continue to plunge through the fourth quarter.

The Globe and Mail reported that investment bankers who led the record-breaking year of Canadian IPOs in previous years suggest that some companies should consider reprivatization after a crash in their stock prices. The outlet reported that among the 20 tech companies that went public in 2020 and 2021, only MindBeacon Holdings has returned to the private markets so far, being acquired by Vancouver healthtech provider CloudMD for $116 million CAD.

Another Canadian company that is hovering around the minimum share price requirement on Nasdaq is mCloud, which began trading on the exchange in November 2021. Since then, mCloud’s share price has fallen by 91.58 percent YTD, priced at $1.02 USD at the time of publication.

With the tech bubble bursting at all sides, Big Tech is not exempted. Last week proved to be one of the worst for tech stocks, with investors in FAANG companies losing more than $218 billion by Friday’s market close and more than $3 trillion for the whole year.

Mogo’s investor relations contact did not respond to questions from BetaKit by time of publication.

Featured image courtesy Mogo.

Charlize Alcaraz

Charlize Alcaraz

Charlize Alcaraz is a staff writer for BetaKit.

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