SaverOne 2014 Ltd.: A Reverse Split Leads to Nasdaq Delisting
On February 20, 2025, SaverOne 2014 Ltd. (SVRE) received a letter from Nasdaq’s Listing Qualifications Department, notifying the company of its non-compliance with Nasdaq Listing Rule 5550(a)(2). This rule requires listed companies to maintain a minimum bid price of $1.00 per share.
The usual course of action for a non-compliant company would be to be afforded a 180-day period to demonstrate compliance with the Minimum Bid Price Requirement. However, due to recently enacted Nasdaq regulations, SaverOne 2014 Ltd. is not eligible for this period. The reason for this waiver? The company had effected a reverse stock split over the prior one-year period.
What is a Reverse Stock Split?
A reverse stock split is a corporate action in which a company reduces the number of its outstanding shares while increasing the share price, in order to meet certain regulatory requirements or to make the stock price more attractive to investors. In this case, SaverOne 2014 Ltd. underwent a 1-for-10 reverse stock split in February 2024.
Impact on SaverOne 2014 Ltd.
The delisting of SaverOne 2014 Ltd. from Nasdaq will have significant consequences for the company. As a delisted company, SVRE will no longer be subject to the continued reporting requirements of the Securities Exchange Act of 1934. This means that the company will no longer need to file reports with the Securities and Exchange Commission (SEC), such as Form 10-Q and Form 10-K.
Additionally, being delisted from Nasdaq may make it more difficult for SaverOne 2014 Ltd. to attract new investors, as many institutional investors have strict guidelines regarding which stocks they are allowed to hold in their portfolios. This could potentially limit the company’s access to capital.
Impact on Investors
For investors holding SaverOne 2014 Ltd. stock, the delisting could mean several things. First, they may no longer be able to trade the stock on Nasdaq. Instead, they would need to find a different exchange or over-the-counter market to trade their shares. However, it’s important to note that the delisting does not automatically result in the worthlessness of the shares.
Second, investors may face tax implications as a result of the reverse stock split. The Internal Revenue Service (IRS) considers a reverse stock split to be a taxable event, meaning that shareholders may be required to report any capital gains or losses resulting from the split.
Impact on the World
The delisting of SaverOne 2014 Ltd. from Nasdaq is not an isolated event. Other companies have also been delisted for failing to meet the Minimum Bid Price Requirement or for other reasons. This trend could potentially have broader implications for the financial markets, particularly for smaller companies or those in industries that are more volatile.
Additionally, the use of reverse stock splits as a means of maintaining listing eligibility could become more common, as companies look for ways to meet the Minimum Bid Price Requirement without diluting shareholder value through a traditional stock issuance.
Conclusion
The delisting of SaverOne 2014 Ltd. from Nasdaq is a reminder of the importance of maintaining compliance with listing requirements. For the company, this means finding alternative ways to access capital and reporting to regulators. For investors, it may mean finding new trading venues and potentially facing tax implications. And for the world, it could mean a shift in the use of reverse stock splits as a means of maintaining listing eligibility.
As always, it’s important for investors to stay informed about the companies they invest in and to understand the potential implications of corporate actions. And for companies, it’s crucial to maintain transparency and open communication with their shareholders and regulators.
- SaverOne 2014 Ltd. received a letter from Nasdaq notifying of non-compliance with Minimum Bid Price Requirement
- Company not eligible for compliance period due to reverse stock split
- Delisting from Nasdaq could impact company’s access to capital and reporting requirements
- Investors may need to find new trading venues and potentially face tax implications
- Reverse stock splits could become more common as a means of maintaining listing eligibility
