China Finance Online Shares Fell Over 35% Pre-Market: Why It Happened

By Amit Chowdhry ● Aug 16, 2021
  • The shares of China Finance Online Co. (NASDAQ: JRJC) fell by over 35% pre-market. This is why it happened.

The shares of China Finance Online Co. (NASDAQ: JRJC) – a leading web-based financial services company that provides Chinese individual investors with fintech-powered online access to securities trading services, wealth management products, securities investment advisory services, and financial database and analytics services to institutional customers – fell by over 35% pre-market. Investors are responding negatively to the company announcing that on August 11, 2021, it has received a notice from the Nasdaq Stock Market LLC stating that the staff has determined that the company had not been able to provide a satisfactory definitive plan to regain compliance with the $10 million minimum stockholders’ equity requirement for continued listing on the Nasdaq Global Select Market under Nasdaq Listing Rule 5450(b)(1)(A) or sustain such compliance over an extended period of time. 

As of December 31, 2020, China Finance Online’s shareholders’ equity was approximately $4.6 million. And China Finance Online also does not meet the continued listing requirements under alternative standards relating to the market value of listed securities or the total assets or total revenue of the company. The staff cited that China Finance Online’s proposed timeframe to regain compliance is beyond the 180-day period available under Nasdaq Listing Rule 5810(c)(2)(B) and that the company’s history of loss would negatively affect the company’s ability to regain or sustain compliance. The staff determined to seek to delist China Finance Online’s securities from Nasdaq unless the company requests a hearing before the Nasdaq Hearings Panel by August 18, 2021.

China Finance Online intends to timely request a hearing before the panel. And such a request will stay any suspension or delisting action by Nasdaq pending the panel’s decision. There can be no assurance that the panel will grant China Finance Online’s request for continued listing. And if the panel does not grant China Finance Online’s request for continued listing, its securities will be subject to delisting and the liquidity and marketability of the company’s American Depositary Shares would be adversely affected.

This announcement is made in compliance with Nasdaq Listing Rule 5810(b) — which requires prompt disclosure of receipt of a delisting notification.

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.