China Ceramics Co. Ltd. (CCCL) stock last week went through a reverse split. For the split effective September 3, the company announced getting approval of its Board of Directors on last Wednesday.
China Ceramics is a leading China-based manufacturer of ceramic tiles. The tiles have been for exterior siding as well as in interior flooring and design in resident and commercial buildings. Company’s ordinary shares commenced September 3 trading on an adjustment basis. After the reverse split, G2113X159 si new CUSIP number allotted to common stock of the company.
The reverse split was approved by BOD to comply with the NASDAQ listing requirement of having per-share bid price of at least $1.00 to continue trading. NASDAQ Capital Market required company stock to have closing price of $1.00 or more for at least 10 consecutive days and deadline for that was September 21, 2020.
The company acted to regain compliance with NASDAQ Stock Market’s minimum bid price requirement. But the reverse split does not guarantee ability of any stock to remain above $1.00 criteria and same is the case with CCCL. If the stock failed to comply with the minimum requirement, it will face delisting from the NASDAQ Stock Market. And that will be resulting in significantly hurting company’s value and liquidity of its securities.
The reverse split acted as combining every three issued and outstanding ordinary shares into one on effective date. That reduced the company’s 9.2 million outstanding ordinary shares to nearly 3.1 million shares. This also resulted in par value of each new share to $0.024 from previous par value of $0.0008. The company will issue the stockholders with one full share of common stock with post-reverse value. Company has a choice of issuing its shareholders with fractional shares but it opted to issue full share instead.
The reverse stock split will also applicable to warrants, purchase rights and options and these will also be adjusted on a proportionate basis to record the effect.
The stock was at loss of -0.98% with $2.02 price during early trading on Wednesday.