Nasdaq could take Webvan's stock off the road
The online grocer has three months to improve its stock price or it will be delisted from the Nasdaq, a company spokesman says.
A Nasdaq official phoned executives at the online grocer late last week about the possible delisting, Webvan spokesman Bud Grebey said. A letter was sent to the company the same day.
Foster City, Calif.-based Webvan has been trading below $1 since November, and ended the regular session Wednesday at 50 cents.
The Nasdaq requires a minimum share price of $1. If the price falls below $1 for 30 consecutive trading days, the company risks being delisted, Nasdaq spokesman Mark Gundersen said.
Now the clock is ticking for Webvan, which has 90 days to see its stock climb above $1 and stay there for at least 10 consecutive days to avoid being delisted.
"The continued low valuation is a concern," Grebey said. "The way to raise that is to focus on the objectives we've set for ourselves. The outside world is looking for us to deliver on that."
Investors have lost faith in the once high-flying Webvan, which operates in 10 markets and has a $1 billion infrastructure contract with engineering-construction company Bechtel. Webvan, which delivers groceries and convenience goods ordered from its Web site, has yet to report a profit in any of the cities it operates.
Webvan's stock was downgraded by a score of analysts last year after the company did not reach its goal of being profitable in the San Francisco Bay Area market by its fifth quarter of operation. The downgrades sent the stock tumbling to below $1.