Tuniu, one of China’s leading online leisure travel companiesannounced on Monday that it received a warning from Nasdaq on April 13 because the closing price of its American Depositary Shares (ADS) had fallen below the requirements to maintain its listing on the stock exchange.
Under Nasdaq listing rules, a listed company will normally receive a delisting warning if its stock price falls below $1 per share and stays there for 30 consecutive business days. Generally, if the company fails to raise its share price to the trading standard level within 90 days of receiving the warning, the company will be forced to delist.
However, given the impact of the Covid-19 outbreak on the global economy, the Nasdaq had to adjust the rule in 2020, extending the time frame from 90 days to 180 days. Therefore, Tuniu has 180 days to increase its share price above $1 per share for more than 10 consecutive business days to avoid being delisted.
Tuniu said in the announcement that the notification letter has no current impact on the company’s trading on the Nasdaq stock exchange and that the company will take all reasonable steps to return to compliance. Additionally, if its stock price does not reach the required $1 per share threshold by October 10, 2022, Nasdaq authorities can still grant the company an additional 180-day compliance period.
This is the second time Tuniu has received a delisting warning from the Nasdaq since the outbreak began. In May 2020, Tuniu received the first notification letter from the stock exchange as the company’s stock price fell below $1 per share and remained there for over a month.
Tuniu subsequently announced an agreement with Caissa Tosun Development Co., Ltd., while JD.com transferred all Tuniu shares held by its subsidiaries to Caissa Tosun Development Co., Ltd. The three parties have jointly developed a tourism business. This series of actions effectively increased Tuniu’s share price and allowed the company to remain listed on the Nasdaq.
SEE ALSO: Trip.com Reveals Data on Hybrid Work Plan: Most Popular Among Men
However, since 2020, Tuniu’s performance has not improved. On March 16 this year, the company announced its unaudited annual performance report for fiscal 2021. The report shows that the company made a net profit of 426.3 million yuan ($66.5 million). ) in 2021, down 5.3% from 2020. Meanwhile, its annual operating loss narrowed to 180 million yuan from 1.3 billion yuan in 2020, and net losses increased decreased by 90% to 130 million yuan. The company’s gross profit margin for the full year decreased 7 percentage points year over year to 40.2%.