Microlender Qudian Faces NYSE Delisting Risks for Falling below USD 1 Mark

Financials Author: Yiru Qian Editor: Tao Ni Feb 18, 2022 09:40 PM (GMT+8)

Qudian is increasingly deviating from its ambitions to become a USD 100 billion market-cap company

Finance, consumer finance

China's online consumer finance service provider Qudian Inc. (QD:NYSE) announced recently that it had received a letter from the NYSE dated February 7, notifying that the trading price of its American depositary shares (ADS) is below the NYSE's continued listing standards on February 10, 2022.

Pursuant to the NYSE's policy, a company will be considered to be below compliance standards if the average closing price of its securities as reported on the consolidated tape is less than USD 1 for over a consecutive 30 trading-day period. 

In other words, the company sinks into danger zone of suspension and delisting procedures forward. However, the company has six months ("the Cure Period") upon receipt of the notice to pull up its share price to above the minimum required USD 1 within a short period of time.

To address this issue, Qudian said it intended to monitor the market performance of its securities and is still considering its options. The company has notified the NYSE on February 10, 2022 of its intent to  extricate its stock prices from the USD 1 danger zone. During the cure period, the company's ADSs will continue to be listed and traded on the NYSE, subject to compliance with other NYSE continued listing standards and other rights of the NYSE to delist the ADSs. 

Founded in March 2014 as a major fintech platform, Qudian has entered several business areas, including cash loans, auto retail, cross-border luxury e-commerce, and children's education.

It was listed under the ticker symbol QD on the New York Stock Exchange in October 2017. Its share price once peaked at USD 35.4 with a USD 10 billion market cap; however, the prices ticked up and down constantly in the following years.

As of February 15, QD closed at USD 0.99 per share, representing a drop of about 98% from its all-time high.

"I personally will no longer take any salary or bonus from the company since January 1, 2018 until the market value reaches USD 100 billion," said Luo Min, founder and CEO of Qudian in 2018.

Qudian slipped into the red in the third quarter of 2021 according to its financial report. The total revenue was USD 347.4 million, down 59.1% year on year.

Notably, the fintech player reported a net loss of USD 94.2 million, plunging 115.9% year on year from a net profit of USD 592.3 million in the same period last year. This further sparked a selloff that sent its stock to all-time lows below USD 1 and threw its listing into question.