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Elys Game Technology (ELYS), a gaming and sports betting tech company, announced it was delisted from the Nasdaq stock exchange effective yesterday, according to a press release from the company.
Nasdaq chose to delist ELYS stock because the shares could not maintain a minimum value of $1. The company has received multiple delisting notices over the past two years as its stock price struggled to stay above $1 per share.
News of the delisting caused shares to plummet from 51 cents at close on Friday to 15 cents at close on Tuesday.
What delisting means for Elys
While delisting may sound bad, it’s not a death sentence for a company. Elys has the option of appealing Nasdaq’s decision within 15 days after receiving their delisting notice.
Elys is considering an appeal, according to its press release. “The Company’s evaluation will take into account various factors, including the board’s assessment of the likelihood of the Company regaining and maintaining compliance with the continued listing requirements, through a reverse stock split,” Elys said.
A reverse stock split reduces the number of a company’s shares to boost the price. For example, four shares of ELYS at 60 cents would total $2.40. In a 4-to-1 stock split, those four shares at 60 cents a piece would become one share valued at $2.40. In boosting the price, the company’s shares now comply with Nasdaq’s minimum trading value rules.
Third-party lottery platform Lottery.com executed a reverse stock split this past month after receiving a delisting notice from Nasdaq.
Elys is choosing to head to the OTC market
Doing a reverse stock split may not be in the cards for Elys, though. The company noted that maintaining Nasdaq compliance is expensive—about $1.6 million. It’s more cost-efficient to operate on the over-the-counter (OTC) market, where companies with sub-$1.00 share prices often find a home.
Elys commented:
“In anticipation of realizing substantial cost savings, the Company sees opportunities to streamline operations through delisting and deregistration. These benefits include lower operating costs, reduced management time commitment to compliance and reporting activities, and a simplified corporate governance structure.”
Elys will continue to meet the Securities and Exchange Commission‘s reporting rules while it’s listed on an OTC exchange, and it will not waver in its “commitment to continue operating as usual.”
Delisting comes amid company growth
Elys has made several moves in the US sports betting market over the past few months. This past week, Elys announced the branding for the sportsbook it plans to launch in the next few months: SportBet.com.
In July, the company was awarded a Class III sports betting license in North Dakota. Also, the company rebranded its North American operations to Elys America.
