GI Dynamics (ASX:GID) plans to hold a special shareholders meeting to vote on a proposed 1-for-10 reverse stock split in an effort to raise the company’s lagging share price.
The meeting is slated to be held Nov. 10 in Boston. Voting will be restricted to shareholders of record as of the close of business Oct. 4.
"One of the requirements for initial listing on the NASDAQ is a bid price of at least $2.00 per share of common stock. While we may currently meet that listing standard, our board feels it is important that we exceed the initial listing requirement and ensure that, once listed, we are able to meet the NASDAQ’s continued listing requirement of a minimum closing bid price of $1.00 per share of common stock," the company said yesterday in a proxy statement.
"If the reverse stock split successfully increases the per-share price of our shares of common stock, as to which no assurance can be given, the board of directors believes this increase may facilitate future financings and enhance our ability to attract, retain, and motivate employees and other service providers," the Lexington, Mass.-based company added.
In the proxy statement, GI Dynamics said its board authorized the reverse split on Oct. 4.
Meanwhile, GI Dynamics’ foreign-traded shares have taken a beating over the last 2 weeks.
The company on Oct. 6 temporarily halted trading of its shares on the Australian Securities Exchange after news broke that European regulators asked it to suspend shipments of its lead product EndoBarrier pending a review of its system for reporting adverse events.
"The company is working diligently with our notified body and with competent authorities in Europe to remedy our systems and resume product shipments as soon as possible, however based on the current schedule established for review of our systems, we do not expect resolution of the stop shipment before end of October," CEO Michael Dale said in a statement released at the time.
ASX-traded shares of GI Dynamics have slid from 46¢ apiece Oct. 6 to close at 25¢ each today.