Hippo proposing reverse stock split following NYSE non-compliance notice
The insurtech is proposing a ratio in the range of 1-for-20 to 1-for-30.
Insurtech Hippo Holdings Inc. is moving to execute a reverse stock split following a noncompliance notice from the New York Stock Exchange, which reported the company’s stock had an average closing price of less than $1 over a consecutive 30-day trading period.
The notice has no immediate effect on the listing or trading of Hippo’s common stock, according to filings with the U.S. Securities and Exchange Commission.
A meeting with stockholders is set for August 31, 2022, at which time Hippo will propose:
- A reverse stock split at a ratio in the range of 1-for-20 to 1-for-30.
- A reduction in the number of authorized shares of capital stock of the company by a corresponding proportion.
The insurtech can regain compliance any time in the coming six months if on the last trading day of any month during the period its closing price is at least $1 per share and the average closing price per share during the preceding 30-days was at least $1, according to the SEC. Failure to regain compliance in that timeframe could result in the delisting of the stock.
‘I’ve experienced better years’
This news comes on the heels of comments from Assaf Wand, founder and executive chairman of Hippo, indicating the company’s stock underwent a “correction.”
“Let’s just say I experienced better years than this last year,” Wand said during the Calcalist and Discount Bank’s Unicorn Forum. “We were worth $5-$6 billion and now we are worth half a billion dollars. There is a major correction.”
He went on to note that many other tech-forward companies, such as Pinterest, DoorDash and Peloton, have experienced similar adjustments.
“I have been studying the crisis of 2001 for the last few months. At the end, it is a correction that comes after very low-interest rates and things get cleaned out. At the moment it has gone too far to the other side,” he said during the event.
However, Wand closed by stating Hippo is in a much better condition now than when it was worth $6 billion.
“Think about the alternative: To be worth $3 billion, but everyone knows it’s not the correct price because one investor on the private side is not like many investors on the public side,” Wand said. “I prefer to be valued at $750 million and reach profitability. The crisis will end in 24 months and I have money to survive this. I’d rather receive the blow and deal with it directly.”
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