ATLANTA - KORE Group Holdings, Inc. (NYSE: KORE), a company specializing in Internet of Things (IoT) solutions, disclosed on Monday that it has received a notice from the New York Stock Exchange (NYSE) for not meeting the market capitalization and stockholders' equity standards required for continued listing.
The notice, dated September 12, 2024, indicates that KORE's average global market capitalization fell below $50 million over a 30-day trading period, concurrently with its stockholders' equity also being less than $50 million. These conditions breach Section 802.01B of the NYSE's Listed Company Manual, prompting the need for corrective action.
In response, KORE plans to submit a detailed plan to the NYSE within the next 45 days, outlining measures it will take to regain compliance with the listing standards. If the NYSE approves the plan, KORE's common stock will remain listed during an 18-month cure period, provided the company adheres to other listing standards and passes periodic NYSE reviews.
Despite the notice, KORE anticipates that its common stock will continue to be listed and traded on the NYSE, as long as it complies with the exchange's other continued listing standards. The company has made clear that the receipt of the notice does not impact its business operations or its reporting obligations with the Securities and Exchange Commission.
KORE is recognized for delivering mission-critical IoT solutions and services, aiming to simplify the complexity of IoT for organizations across various sizes and industries. The company emphasizes its extensive IoT knowledge, global reach, and agile deployment as factors that enhance and accelerate customer business outcomes.
The information in this article is based on a press release statement from KORE. The company's forward-looking statements regarding its plans to address the NYSE listing deficiency are subject to various risks and uncertainties, and there can be no assurance that KORE will be able to successfully implement its compliance plan or maintain its NYSE listing.
In other recent news, KORE Group Holdings Inc. has been the subject of significant developments. The firm recently experienced a downgrade in its stock rating from "Buy" to "Hold" by TD Cowen, following concerns over revenue growth challenges and major internal restructuring. This includes a 25% workforce reduction and significant changes in executive leadership, which TD Cowen believes could impact the company's future performance.
In addition to the rating downgrade, KORE Group announced a downward revision of its 2024 financial guidance amid a restructuring plan. Despite a 16% growth in IoT connectivity revenue, the company reported a substantial net loss of $64.3 million for the recent quarter. The revised 2024 guidance anticipates revenue of $275 million to $285 million and adjusted EBITDA of $54 million to $56 million.
The restructuring plan, which includes the aforementioned workforce reduction, is projected to save between $5 million and $6 million in 2024. Despite facing customer implementation delays and other market challenges, KORE Group expects its connectivity business to grow in 2025 and to be free cash flow positive by the end of 2024. These are among the recent developments in the company's strategy to improve its financial performance in the coming years.
InvestingPro Insights
In light of KORE Group Holdings' recent notice from the NYSE regarding its market capitalization and stockholders' equity, a review of the company's financial health is pertinent. According to real-time data from InvestingPro, KORE's market capitalization stands at approximately $42.52 million, underscoring the challenge it faces in meeting the NYSE's standards. Additionally, the company's price to earnings (P/E) ratio is negative at -0.2, reflecting market skepticism about its future profitability, as highlighted by the fact that analysts do not anticipate KORE will be profitable this year, an InvestingPro Tip that sheds light on investor sentiment.
Despite these financial metrics, KORE's management has been proactively engaging in share buybacks, a move that could signal confidence in the company's future value and a potential upside for investors. It's also noteworthy that KORE's liquid assets exceed its short-term obligations, suggesting a degree of financial resilience that may support its strategic plan to regain compliance with NYSE listing standards.
However, the stock has experienced significant price volatility, with a price drop of over 25% in the last three months, which aligns with another InvestingPro Tip regarding its high price volatility. Investors considering KORE will find additional InvestingPro Tips, such as the company's trading at a high EBITDA valuation multiple and its lack of dividend payments, to be valuable in assessing the stock's potential risks and rewards. For a more comprehensive analysis, there are 12 additional tips available on InvestingPro's platform.
As KORE navigates this challenging period, these insights provide a deeper understanding of its financial standing and market perception, which are crucial for stakeholders monitoring the company's efforts to maintain its NYSE listing.
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