Solo Brands, the parent company of Solo Stove, grew rapidly through the Pandemic like many other companies in the space. They’ve fallen on tough times though over the past year-and-a-half.
While it didn’t necessarily cause the issues, the Snoop Dogg Solo Stove ad seemed to mark the point in time when Solo Stove changed trajectory. Since then they’ve turned over their entire executive team, and worked with consultants to develop a new strategy for the company.
Recently the company has shed products and plans to move into adjacent categories in search of growth. Time will tell if their new strategic plan works.
It appears over the past few weeks that the new path forward has impacted more employees. We’ve seen on LinkedIn multiple posts about company-wide layoffs, with impacted employees searching for work.
There hasn’t been any public statements or filings about the layoffs, but there appear to be impacted workers from different functional areas. We expect to hear more about it when Solo Brands reports their 2024 earnings in the near future.
Solo Brands future as a publicly traded company may also be at risk if they can’t sell The Street on their progress with the strategy, which may have been a factor in the layoffs. Solo Brands’ stock price hit $0.89 per share this week.
A price below $1 can become problematic on the NYSE because there are minimum share price requirement to be listed. Solo Brands’ stock dropped below $1 on January 31st, where it has remained.
The following language on minimum price criteria is from the NYSE Listed Company Manual.
802.01CPrice Criteria for Capital or Common Stock A company will be considered to be below compliance standards if the average closing price of a security as reported on the consolidated tape is less than $1.00 over a consecutive 30 trading-day period (the “Price Criteria”).
Once notified, the company must bring its share price and average share price back above $1.00 by six months following receipt of the notification. A company is not eligible to follow the procedures outlined in Paras. 802.02 and 802.03 with respect to this criteria. The company must, however, notify the Exchange, within 10 business days of receipt of the notification, of its intent to cure this deficiency or be subject to suspension and delisting procedures. In addition, a domestic company must disclose receipt of the notification by issuing a press release disclosing the fact that it has fallen below the continued listing standards of the Exchange within the time period allotted by SEC rules for the making of a filing with respect to Exchange notification of that event, but no longer than four business days after notification. A non-U.S. company must issue this press release within 30 days after notification. If the company fails to issue this press release during the allotted time period, the Exchange will issue the requisite press release. The company 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 the company has a closing share price of at least $1.00 and an average closing share price of at least $1.00 over the 30 trading-day period ending on the last trading day of that month. In the event that at the expiration of the six-month cure period, both a $1.00 closing share price on the last trading day of the cure period and a $1.00 average closing share price over the 30 trading-day period ending on the last trading day of the cure period are not attained, the Exchange will commence suspension and delisting procedures.