Reverse Stock Split Resolves Nasdaq Delisting Threat

Written By J.R. Duren on September 14, 2023
Wall Street Bull Statue, American Flag, Stock Exchange Graphic with and NASDAQ logos has escaped Nasdaq delisting once more.

The company, which has been under the threat of delisting from the tech-focused stock exchange multiple times over the past year, escaped being removed from the exchange by boosting its stock price through a reverse stock split.

How’s Nasdaq delisting saga unfolded

One of Nasdaq’s requirements for listing (making companies available for trading) on its stock exchange is that a company’s stock price has to stay above $1 for 30 consecutive business days. If the stock price dips below that threshold, Nasdaq can remove the company from its exchange. first came under the threat of delisting for stock price in August 2022, when Nasdaq informed the company it had 180 days to get its stock price above $1 for 30 consecutive business days. failed to do so by the 180-day deadline, and Nasdaq was ready to delist the company on March 6.’s only option, at that point, was to file an appeal that would put the delisting on hold. On March 1, then-CEO Mark Gustavson announced the company would submit an appeal to the Nasdaq panel deciding its fate. Gustavson said in a press release:

“Although there can be no assurance that the Panel will provide us a further extension to comply with Nasdaq’s listing requirements or stay the suspension of the trading of the Company’s securities on Nasdaq, we are working hard to become compliant in our filing obligations.” successfully filed an appeal that staved off delisting. On Aug. 7, the company’s shareholders voted to approve a reverse stock split, which is a method of converting more shares into fewer shares to boost stock price.

For example, if you had 20 shares of a company at $1 each and the company implemented a 20-to-1 reverse stock split, you’d have one share worth $20. From a delisting perspective, a reverse split provides an instant boost in stock price, such that the company’s shares aren’t in danger of falling below $1.

Interm CEO Matthew McGahan said in a press release at the time:

“The overwhelming support from our shareholders for the reverse stock split is a very important milestone in the transformation of our Company. With these positive developments, we are poised to attract new opportunities and unlock greater potential for our business.”

Stock price scare wasn’t’s only close encounter with delisting has faced the threat of delisting at least three different times over the past year. In Sept. 2022, Nasdaq informed it needed to add more board members to its board of directors after all but one board member resigned. remedied that situation by finding two board members to fill empty seats.

However, less than six months later, the beleaguered company found itself in violation of Nasdaq’s minimum board requirements after board member Naila Chowdhry resigned, leaving only two people on the board. Additionally, the company violated Nasdaq’s standard for the timely filing of key financial forms with the Securities and Exchange Commission.

The US online lottery company was removed from trading on the Nasdaq for a brief period but returned to trading on June 12.

Photo by PlayUSA
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J.R. Duren

J.R. Duren has covered the gambling beats for more than a dozen states for Catena Media since 2015. His past reporting experience includes two years at the Villages Daily Sun, and he is a first-place winner at the Florida Press Club Excellence in Journalism Contest.

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