Stem, Inc. Receives Continued Listing Standard Notice from NYSE

Rhea-AI Summary

Stem (NYSE: STEM) has received a notice from the New York Stock Exchange (NYSE) on August 28, 2024, stating that its average closing stock price has fallen below $1.00 per share over 30 consecutive trading days, violating the NYSE's minimum price requirement. Stem has a six-month cure period to regain compliance by achieving a closing price of at least $1.00 per share and an average closing price of $1.00 over a 30-trading-day period. The company's shares continue to trade on the NYSE, subject to other listing requirements. Failure to meet these conditions could result in delisting. Stem assures that this notice does not affect its business operations, SEC reporting obligations, or existing debt agreements.

Positive

• Stem's shares continue to trade on the NYSE during the cure period
• The company has a six-month window to regain compliance
• The notice does not affect Stem's business operations or SEC reporting obligations
• No conflict or default triggered in Stem's material debt or other agreements

Negative

• Stem's stock price has fallen below $1.00 per share average over 30 consecutive trading days
• Risk of potential delisting from NYSE if compliance is not regained
• Indication of significant stock price decline, potentially affecting market capitalization and investor confidence

Insights

Financial Analyst

The NYSE's notice to Stem regarding its sub-$1 share price is a significant red flag for investors. This situation reflects deep-seated financial challenges and market skepticism about Stem's business model or growth prospects. The $1 threshold is important for maintaining NYSE listing and falling below it often indicates severe financial distress.

While Stem has a six-month cure period, achieving a sustained price recovery could be challenging without fundamental improvements in the company's financial performance or market perception. Investors should closely monitor Stem's upcoming financial reports and strategic initiatives for signs of a turnaround. The risk of delisting, if not addressed, could lead to reduced liquidity and institutional investment, potentially exacerbating the stock's downward pressure.

Market Research Analyst

Stem's listing predicament is symptomatic of broader challenges in the clean energy sector. The company, which specializes in AI-driven energy storage solutions, has faced headwinds from rising interest rates and supply chain disruptions. These factors have likely contributed to investor skepticism, reflected in the stock's performance.

However, the long-term outlook for energy storage remains robust, with the global market projected to grow at a CAGR of 15-20% through 2030. Stem's ability to capitalize on this growth while addressing its immediate financial challenges will be crucial. Investors should weigh the company's technological edge and market position against its current financial struggles when assessing its long-term viability.

Legal Expert

The NYSE's notification to Stem triggers several legal and compliance considerations. While not an immediate cause for delisting, it puts the company under heightened scrutiny. Stem must now navigate SEC reporting requirements with extra caution, ensuring full transparency about its plans to regain compliance.

Additionally, this situation may expose Stem to increased litigation risk from shareholders, particularly if the company fails to execute a successful turnaround strategy. Management must be vigilant in their communications to avoid any statements that could be construed as misleading investors about the company's prospects. The six-month cure period provides a critical window for Stem to demonstrate its commitment to shareholder value and regulatory compliance.

SAN FRANCISCO--(BUSINESS WIRE)-- Stem (“Stem” or the “Company”) (NYSE: STEM), today announced that, on August 28, 2024, it had received a written notice from the New York Stock Exchange (the “NYSE”) that the average closing price of its shares of common stock had fallen below $1.00 per share over a period of 30 consecutive trading days, which is the minimum average closing price required to maintain continued listing on the NYSE.

Stem will respond to the NYSE within 10 business days of receipt of the notice regarding its intent to cure the deficiency and return to compliance with the NYSE continued listing requirements. Under the NYSE's rules, the cure period extends for six months following receipt of the notice.

The Company's shares of common stock continue to trade on the NYSE, subject to compliance with other continued listing requirements.

Under the NYSE’s rules, Stem can regain compliance at any time during the six-month cure period if, on the last trading day of any calendar month during the cure period, its common stock has a closing share price of at least $1.00 per share and an average closing price of at least $1.00 per share over the 30-trading-day period ending on the last trading day of such month. Failure to satisfy the conditions of the cure period or to maintain other listing requirements could lead to a delisting. The NYSE’s notice does not affect Stem’s business operations or its reporting obligations with the SEC, and does not conflict with or cause an event of default under any of Stem’s material debt or other agreements.

About Stem

Stem provides clean energy solutions and services designed to maximize the economic, environmental, and resiliency value of energy assets and portfolios. Stem’s leading AI-driven enterprise software platform, Athena® enables organizations to deploy and unlock value from clean energy assets at scale. Powerful applications, including AlsoEnergy’s PowerTrack, simplify and optimize asset management and connect an ecosystem of owners, developers, assets, and markets. Stem also offers integrated partner solutions to help improve returns across energy projects, including storage, solar, and EV fleet charging. For more information, visit www.stem.com.

Forward-Looking Statements

Statements contained in this press release that are not statements of historical fact, including those that refer to our expectation to regain compliance with NYSE listing rules and the non-acceleration of our debt, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results or outcomes to differ materially from those expressed or implied by such forward-looking statements, including but not limited to our ability to execute on, and achieve the expected benefits from, our operational and strategic initiatives; our ability to regain compliance with the NYSE’s continued listing standards; our ability to secure sufficient and timely inventory from our suppliers, as well as contracted quantities of equipment; our ability to meet contracted customer demand; supply chain interruptions and manufacturing or delivery delays; disruptions in sales, production, service or other business activities; general macroeconomic and business conditions in key regions of the world, including inflationary pressures; the results of operations and financial condition of our customers and suppliers; pricing pressures; our ability to continue to grow and manage our growth effectively; our ability to attract and retain qualified employees and key personnel; our ability to comply with, and the effect on our business of, evolving legal standards and regulations, including those concerning data protection, consumer privacy, sustainability, and evolving labor standards; risks relating to the development and performance of our energy storage systems and software-enabled services; and other risks and uncertainties discussed in our most recent Forms 10-K, 10-Q and 8-K filed with or furnished to the SEC. Statements in this press release are made as of the date of this release, and Stem disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events, or otherwise, except as required by law.

Source: Stem, Inc.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240830808479/en/

Stem Investor Contacts

Ted Durbin, Stem

Marc Silverberg, ICR

IR@stem.com

Stem Media Contact

Suraya Akbarzad, Stem

press@stem.com

Source: Stem, Inc.

FAQ

What NYSE listing requirement has Stem (STEM) violated as of August 28, 2024?

Stem (STEM) has violated the NYSE requirement of maintaining an average closing stock price of at least $1.00 per share over a period of 30 consecutive trading days.

How long does Stem (STEM) have to cure its NYSE listing deficiency?

Stem (STEM) has a six-month cure period from the date of notice (August 28, 2024) to regain compliance with NYSE's continued listing requirements.

What must Stem (STEM) do to regain compliance with NYSE listing standards?

To regain compliance, Stem (STEM) must achieve a closing share price of at least $1.00 and an average closing price of $1.00 over a 30-trading-day period by the end of the six-month cure period.

Will Stem's (STEM) shares continue to trade on the NYSE during the cure period?

Yes, Stem's (STEM) shares will continue to trade on the NYSE during the cure period, subject to compliance with other continued listing requirements.