Purple Innovation (NASDAQ:PRPL), Inc., a Delaware-incorporated company specializing in household furniture manufacturing, has received a notice from The Nasdaq Stock Market on Monday, indicating that the company does not meet the minimum bid price requirement. According to the notice, the closing bid price of Purple Innovation's common stock has fallen below the $1.00 threshold for 30 consecutive business days, violating Nasdaq Listing Rule 5450(a)(1).
The company, listed under the ticker PRPL, now has a 180-day period, until May 12, 2025, to address this issue and regain compliance. To achieve this, the stock's closing bid price must be at or above $1.00 for at least ten consecutive business days within this timeframe. If Purple Innovation fails to meet this requirement by the deadline, it may be granted an additional 180 days if it transfers to The Nasdaq Capital Market and meets all other initial listing criteria, excluding the bid price.
Should the company not regain compliance or be ineligible for the transfer, it risks being delisted from Nasdaq. However, Purple Innovation could appeal against such a decision. The company has expressed its intention to monitor its stock price closely and explore all possible options to comply with Nasdaq's requirements. There is no certainty that the company will be able to meet the Nasdaq Listing Rule 5450(a)(1) again or meet other Nasdaq listing standards.
This development was formally announced in a current report filed with the Securities and Exchange Commission on November 13, 2024, by Todd Vogensen, the Chief Financial Officer of Purple Innovation, Inc.
In other recent news, Purple Innovation, a bedding company, reported a 15% year-over-year decline in third-quarter sales, amounting to $118.6 million. This downturn is attributed to a decrease in consumer demand and a significant reduction in advertising spend. Despite this, Purple Innovation maintained a flat volume quarter-over-quarter and saw a 340 basis point improvement in adjusted gross margin.
CEO Rob DeMartini highlighted the company's emphasis on operational efficiencies and strategic initiatives, projecting annual EBITDA savings of $15 million to $20 million starting in 2025. The company anticipates reaching EBITDA and cash flow positivity by the fourth quarter of 2024.
These facts are part of the recent developments surrounding Purple Innovation. The company's direct-to-consumer revenue fell 11.7%, and wholesale revenue decreased by 20.1%. The company anticipates finishing 2024 at the lower end of revenue guidance ($490 million to $510 million) and adjusted EBITDA guidance (negative $20 million to negative $10 million).
InvestingPro Insights
Purple Innovation's current financial situation aligns with the challenges highlighted in the article. According to InvestingPro data, the company's market capitalization stands at a modest $91.66 million, reflecting its precarious position. The stock's price has fallen significantly over the last three months, with a total return of -21.53%, further emphasizing the struggle to maintain the $1.00 minimum bid price required by Nasdaq.
InvestingPro Tips indicate that Purple Innovation is "quickly burning through cash" and "may have trouble making interest payments on debt." These factors could complicate the company's efforts to regain compliance with Nasdaq's listing requirements. Additionally, the tip that "analysts do not anticipate the company will be profitable this year" suggests ongoing financial challenges that may impact investor confidence and stock price.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Purple Innovation, providing deeper insights into the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.