F45 Training's Stock Plummets After NYSE Delisting Decision
Krissy Vann | Host, All Things Fitness and Wellness
F45 Training Holdings Inc. (NYSE: FXLV) has made a strategic decision to voluntarily delist its common stock from the New York Stock Exchange (NYSE) and simultaneously deregister the same under Section 12(b) and Section 12(g) of the Securities Exchange Act of 1934. Additionally, the company will suspend its reporting obligations under Section 15(d) of the Exchange Act.
Triggered by a notice from the NYSE citing non-compliance with continued listing standards due to delayed public filings and a persistently sub-$1.00 average closing price over a 30-day period, F45 Training found itself at a crossroads. The company evaluated its options and concluded that delisting and going dark would be more favorable due to anticipated cost savings. The company's ongoing inability to leverage the benefits of public company status and the hindrance to raising capital or attracting interest from investors and analysts reinforced this decision.
This strategic move holds financial implications, as it releases F45 Training from the financial obligations and costs associated with maintaining public company status. The company also anticipates a reduction in the time allocated by its management and employees for compliance-related tasks, enabling a more concentrated effort on core business operations, franchisee relationships, and the enhancement of shareholder value. The planned filing for delisting and deregistration is slated to take place around August 24, 2023, with the effects of delisting expected to be realized by September 3, 2023.
Market Response and Forward Trajectory
In reaction to the news of its decision, F45 Training witnessed a significant decline in its stock value, plummeting by 77% to 16 cents. This development comes on the heels of a year-long slide, where the stock had already experienced a staggering 94% depreciation. While these figures underscore the market's reaction, the company remains resolute in its stance. By redirecting its focus away from short-term stock fluctuations, F45 Training aims to recalibrate its energies toward long-term growth strategies, fortified relationships with franchisees, and bolstering shareholder value.
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