Movella Announces Nasdaq’s Planned Suspension of Trading of Securities
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Insights
The announcement by Movella Holdings Inc. regarding its voluntary delisting from the Nasdaq Global Market is a significant event with potential implications for investors and the company's financial strategy. Delisting, in general, can occur for various reasons, including cost savings on listing fees, desire for more privacy, or as a prelude to other strategic moves such as mergers or acquisitions.
Investors should note that delisting from a major exchange like Nasdaq often leads to reduced liquidity and visibility for a company's securities. This can impact the stock's volatility and the ease with which investors can buy or sell shares. Additionally, institutional investors may have mandates that only allow them to hold securities listed on major exchanges, which could lead to a sell-off if they are required to divest.
However, the decision to delist voluntarily suggests that Movella's management may believe that the benefits of being a private company or listing on a different exchange outweigh the costs and benefits of staying on the Nasdaq. This could be due to a strategic pivot that requires less public scrutiny or the pursuit of financial restructuring that might be facilitated by a more private setting.
From a market perspective, Movella Holdings Inc.'s delisting could indicate a shift in the company's operational focus or strategic direction. Movella, being a provider of sensors and analytics for digitizing movement, operates in a highly competitive and fast-evolving tech sector. Delisting might allow the company to operate with greater flexibility away from the public eye, which could be advantageous if it's planning to develop new proprietary technologies or undergo significant restructuring.
It's also important to consider the market's perception of the delisting. While it may raise questions about the company's financial health or future prospects, it could also be seen as a move to align the company's capital and governance structures with its long-term strategy. The impact on the stock market will largely depend on the reasons behind the delisting and the company's subsequent performance and strategic decisions.
Legally, the process of delisting requires adherence to specific SEC regulations and procedures, as indicated by Movella's filing of the Current Report on Form 8-K. This ensures transparency and provides shareholders with relevant information. The company's management must navigate this process carefully to avoid legal pitfalls and ensure compliance with securities laws.
Shareholders should be aware that delisting does not absolve the company of its reporting obligations immediately. Movella will still be required to file periodic reports with the SEC unless it further reduces the number of its shareholders below the reporting threshold or takes additional legal steps. It's important for stakeholders to closely monitor these filings for insights into the company's operational and financial health post-delisting.
HENDERSON, Nev., March 26, 2024 (GLOBE NEWSWIRE) -- Movella Holdings Inc. (NASDAQ: MVLA) (“Movella” or the “Company”), a leading full-stack provider of sensors, software, and analytics that enable the digitization of movement, announced today that it was notified by the Nasdaq Stock Market LLC (“Nasdaq”) of the timing of Nasdaq’s planned suspension of trading of the Company’s securities.
As previously disclosed in its Current Report filed on Form 8-K with the Securities and Exchange Commission (the “SEC”) on March 20, 2024 (the “8-K”), the Company notified Nasdaq of the Company’s decision to voluntarily delist its shares of common stock, par value
The Securities will remain listed on Nasdaq while trading is suspended until the effectiveness of the Form 25 filing on or about April 11, 2024, after which time the Securities will be delisted from Nasdaq.
Following the delisting of Movella’s Securities from trading on Nasdaq, any trading in the Securities would only occur in privately negotiated sales and potentially on an over‐the‐counter market. Movella expects to have its Securities quoted on a market operated by OTC Markets Group Inc. (the “OTC”) on April 12th so that a trading market may continue to exist for the Securities. There is no guarantee, however, that a broker will continue to make a market in the Securities or that trading thereof will continue on an OTC market or otherwise.
As previously disclosed, Movella’s Board of Directors (the “Board”) considered whether the Company could regain compliance in the given timeframe but decided that attempting to regain compliance was not in the best interest of the Company and its stockholders. The Board made this decision following its review and careful consideration of a number of factors, including, but not limited to, the Company’s current and likely future inability to comply with the continued listing requirements of the Nasdaq Global Market and the personnel resources and high costs of meeting Nasdaq Global Market disclosure and reporting requirements and related regulatory burdens, costs that have resulted and would continue to result in significant operating expense. In light of these factors, the Board determined that it is in the Company’s best interests that the Company redeploy these resources toward adequately funding the Company’s operations in the future.
About Movella Holdings Inc.
Movella is a leading full-stack provider of sensors, software, and AI analytics that transforms movement data into lifelike animations and valuable, actionable insights. Our motion capture technology enables a wide array of innovative solutions in end markets including entertainment and gaming, health and sports, and automation and mobility. We bring meaning to movement for some of the most esteemed global brands including Electronic Arts, EPIC Games, 20th Century Studios, Netflix, BMW, Toyota, and Siemens. To learn more, please visit www.movella.com.
This press release contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Private Securities Litigation Reform Act of 1995. These statements reflect the beliefs and assumptions of Movella’s management as of the date hereof. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would,” variations of such words, and similar expressions are intended to identify forward-looking statements. These Forward Looking Statements include, but are not limited to: the trading price and volatility of Movella’s securities, the effects of the expected delisting from Nasdaq, the impact and timing of actions by Nasdaq or OTC Markets, including the suspension of trading of the Securities. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Movella’s actual results could differ materially and adversely from those expressed in or contemplated by the forward-looking statements. Factors that could cause actual results to differ include, but are not limited to, those risk factors contained in Movella’s SEC filings, including without limitation, Movella’s annual report on Form 10-K, quarterly reports on Form 10-Q and subsequent filings made by Movella with the SEC. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. Except as required by law, Movella undertakes no obligation to update or revise any forward-looking statements.
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