One of the Baltimore region’s newest public companies is at risk of being delisted from the New York Stock Exchange if its share price does not improve.
BigBear.ai revealed in a Dec. 23 release that it had received a notification from the NYSE on Dec. 20 stating that its stock had failed to maintain an average closing share price of at least $1 over 30 days. Shares of BigBear.ai (NYSE:BBAI) first closed below $1 on Nov. 16 and after some increases, have now closed below $1 every day since Nov. 30. The Columbia software firm has six months to turn its stock around before it could be delisted from the exchange and says it is considering a reverse stock split as one way to do so.
To regain compliance with the NYSE, BigBear.ai must, on the last day of any calendar month, have a closing price above $1 and have maintained an average closing price of at least $1 for the 30-day trading period leading up to that day. The company has lost 92.71% of its stock value since going public in December 2021.
BigBear.ai is considering a reverse stock split in order to avoid delisting, according to a release. A reverse stock split is when a company combines several existing shares in an attempt to drive the price up. For example, a company could decide to consolidate 22 shares of a company into a single share, increasing the stock price since there are fewer shares on the market. BigBear.ai said its six-month deadline to improve its stock price could be extended if it decides to move forward with the reverse stock split, since the split would need to be approved at its annual shareholders meeting. This year, BigBear.ai held its shareholders meeting in June.
Increasing BigBear.ai’s stock price will be one of several major challenges facing new CEO Amanda Long. Long took over the job from Reggie Brothers on Oct. 12 and previously served as the vice president of IT automation at IBM, where she helped create the famous “Watson” artificial intelligence.
Long's appointment came not long after the company in September laid off 7% of its then-665 employees because of cash flow issues. BigBear.ai has recorded a loss of $91.7 million for the last nine months, compared to a loss of $8.7 million in the year-ago period. Its revenue is up slightly so far this year, with revenue of $114.6 million for the last nine months compared to $112.1 million a year ago.
The track record for companies like BigBear.ai that went public through a special purpose acquisition company deal, or SPAC is poor, averaging a -43% return. The stock price for another Baltimore SPAC company, ZeroFox is down by 50% from its initial offering price, with shares trading at about $5 on Tuesday afternoon.
BigBear.ai isn't the only Baltimore-area public company facing delisting. Columbia-based GSE Systems revealed in November that it was facing delisting from the Nasdaq exchange after its stock price also fell below $1.
At midday Tuesday, shares of BigBear.ai were trading at 71 cents, a 3.53% decline on the day.
