NYSE: GNC market capitalization, stock price fail to meet listing standards

Supplements company has 45 days to present its plans to meet the standards, but a $441.5 million debt is due next month.

Victoria A.F. Camron, Digital content specialist

April 28, 2020

2 Min Read
GNC Holdings Inc.

The New York Stock Exchange has warned GNC Holdings Inc. that its stock, company valuation and stockholder equity are all below the Exchange's listing standards, putting the stock at risk of being delisted.

GNC announced the notification via press release before the market opened Tuesday. The stock will continue to be listed on the Exchange for now, according to the press release.

NYSE requires companies maintain an average closing price of at least $1 for 30 consecutive trading days. In addition, the average market capitalization must be at least $50 million for the same time period or total stockholders' equity must be $50 million or higher.

According to the NYSE notice, GNC's 30-day average stock price as of April 21 was $0.56; its market capitalization average was about $47.3 million; and its stockholders' equity, when reported on Dec. 31, was negative $207.3 million, which illustrates that GNC's liabilities exceed its assets.

The Exchange's policy gives a company 45 days to present a plan for meeting the average share minimum, then six months to fulfill that plan. A company also has 45 days to submit a plan for increasing the market capitalization minimum, then 18 months to meet that minimum standard.

GNC "plans to timely notify the NYSE that it intends to present a plan" to meet both listing requirements, according to the press release.

Related:GNC reports another annual loss in fiscal 2019 earnings report

However, the supplements company has debt of nearly $600 million, $441.5 million of which is due next month. GNC informed the Securities and Exchange Commission in mid-March that would not be able to pay that loan. In a conference call on March 25, Chief Financial Officer Tricia Tolivar announced that "certain lenders in Asia" would not refinance the debt.

GNC stock closed at $3.34 on Nov. 11, its 52-week high, and started the year at $2.76. After the declaration to the SEC, though, the stock price dropped to $0.50 on March 17 after closing at $1.08 on March 16. With the news that the attempt to refinance the debt had failed—and the temporary closing of numerous stores due to the COVID-19 pandemic—the stock fell to its 52-week low and closed at $0.39 on March 25.

One long-term investor, John Tang, and a group of individual shareholders have formed the GNC Shareholder Advocacy Group, Tang announced in mid-April. Tang told the Pittsburgh Post-Gazette that he owns 7.9% of outstanding GNC stock.

The group says that GNC "is in need of improvements in terms of corporate governance, manage and communications with the investor community," according to a press release.

Related:GNC's future darkens with grim Q1 financial report

The group's short-term goal is to "urge the board and management take any necessary action to resolver the short-term liquidity issues to avoid the bankruptcy filing." Group members want to discuss with the board and executives issues such as restructuring debt, selling the company, new strategies and initiatives, and selling the company.

About the Author(s)

Victoria A.F. Camron

Digital content specialist, New Hope Network

Victoria A.F. Camron was a freelance writer and editor contracted with New Hope Network from 2015 until April 2022, when she was hired as New Hope Network's digital content specialist—otherwise known as the web editor.

As she continues the work she has done for years—covering the natural products industry for NewHope.com and Natural Foods Merchandiser; writing up earnings calls and other corporate news; and curating roundups of trends and information for the website—she is thrilled to be an official part of the New Hope team. (She doesn't mind having paid holidays and vacations again, though!) Victoria also compiled and edited newsletters, and served as interim content director for Delicious Living in 2016.

Before working as a freelancer, she spent 17 years in community newspapers in Longmont, Colorado, and St. Charles and Wheaton, Illinois. Victoria is a Colorado native and a graduate of Metropolitan State College of Denver.

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