LiveWire dodges penny stock scare as shares rebound above $2 days after NYSE warning
Harley-Davidson-backed LiveWire was warned its shares had slipped below NYSE listing requirements, but within days the stock had climbed back above $2.
It looked like another grim chapter in LiveWire's difficult few years, but just days after being warned it had effectively become a penny stock, the electric motorcycle firm saw its share price bounce back above the crucial $2 mark.
The Harley-Davidson-backed EV brand confirmed it received a notice from the New York Stock Exchange (NYSE) on July 23 after its shares had averaged below $1 over a consecutive 30 trading-day period, putting it in breach of the exchange's continued listing rules. While that sounds serious, the notice doesn't mean LiveWire is about to disappear from the NYSE, and the company has up to six months to restore compliance.
While "penny stock" sounds like a throwaway label, it carries real consequences. Companies with shares trading at very low prices are often seen as higher-risk investments, something that can put off larger investors and pile further pressure on the share price. For firms listed on the NYSE, staying above $1 is also important because falling below that level for a sustained period can eventually lead to delisting if the issue isn't fixed.
Under NYSE rules, LiveWire has ten business days to tell the exchange how it intends to fix the problem. One option on the table is a reverse stock split, which would reduce the number of shares in circulation while increasing their individual value, although that would require shareholder approval if it becomes necessary.
What's interesting is how quickly the market turned around. After the warning came to light, LiveWire's shares rallied sharply, climbing back above $2 within days and, at one stage, trading at more than double the NYSE's minimum $1 threshold. That dramatic recovery doesn't automatically solve the listing issue, as the exchange looks at both the share price and its average over a defined period, but it does remove some of the immediate pressure and gives the company a much stronger platform from which to regain compliance.
The timing also highlights just how volatile LiveWire's stock has become. The company has endured a torrid spell as demand for premium electric motorcycles has failed to match early expectations, with slowing sales, production cuts and wider uncertainty around the EV market all weighing heavily on investor confidence. The share price has spent much of the past year well below the levels seen when LiveWire first listed on the NYSE.
LiveWire says the deficiency notice has no impact on its day-to-day operations and that its shares will continue trading on the NYSE while it works to regain compliance. The company added that it will consider all available options to satisfy the exchange's requirements, should the recent rebound prove short-lived.
Whether this latest rally marks the start of a genuine recovery or simply another bout of volatility remains to be seen, but for a company that only days ago was staring down the barrel of a penny stock label, seeing its shares climbing back above $2 is a turnaround few predicted.
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Simon (AKA Toad) has been working within the motorcycle industry for more than twelve years, and a member of the motorcyclist family since birth. Growing up around British-built single and twins, it was inevitable that a life on two wheels was on the cards, from a very early age!
