Astra outlines plan to avoid Nasdaq delisting, including possible reverse stock split

Manufacturer of spacecraft engines and builder of small rockets astra Thursday outlined a plan to avoid having its stock delisted from the Nasdaq.

As the April 4 deadline imposed by the stock exchange draws near — and Astra shares are still below the $1 per share level it needs to break to remain listed — the company filed a plan earlier this month, asking for a 180-day extension., he said Thursday.

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If successful, the call would give Astra until Oct. 1 to get its shares above $1 for at least 10 consecutive business days.

“Based on our discussions with Nasdaq representatives, we expect to hear from Nasdaq regarding the status of our application on or about April 5, 2023, and we know of no reason why our application would not be not approved,” said Astra’s chief financial officer. Axel Martinez wrote in a blog post.

In its plan, Astra also noted the possibility of carrying out a share consolidation to bring itself back into compliance with Nasdaq listing standards. A reverse merge does not affect a company’s fundamentals, as it is not dilutive to the stock and does not change the valuation of the company, but it would increase the stock price by combining stocks.

A reverse split can be seen as a sign that a company is struggling and is trying to “artificially” boost its stock price, or it can be seen as a way for a viable company with battered stock to continue operations. on a public stock exchange. Functionally, a reverse split, often done as a 1 for 10, would mean that a $3 share, for example, would become $30 per share.

“Astra continues to actively monitor our listing status and intends to preserve our Nasdaq listing,” Martinez wrote.

The company is expected to release its fourth quarter results after the market closes on March 30.

– CNBC’s Scott Schnipper contributed to this report.