The South San Francisco, Calif.-based company's shares last traded over $1 in August. The company completed its initial public offering at $16 on Oct. 6, 1999, and rose as high as $36.50 the next day.
PlanetRx received a notice from the Nasdaq on Sept. 15 saying the market operator would "re-evaluate our compliance with its listing qualifications" if the stock closed at less than $1 for any 10 straight days before Dec. 14, the company said in a filing with the Securities and Exchange Commission.
"The board of directors believes that the reverse stock split is likely to result in the bid price of our common stock increasing over the $1 minimum bid price requirement, thereby permitting the continued listing of our common stock on the Nasdaq national market," PlanetRx said in its SEC filing.
The reverse split would exchange eight existing shares for one new share. At Wednesday's market price, each new share would have an expected market value of $3. The proposal requires a vote for approval from 50 percent of the outstanding common shares. The company sought that approval in its proxy filing Wednesday.
Losing the Nasdaq listing would make trading in the shares more difficult, possibly creating "an adverse effect on the liquidity of our common stock," PlanetRx said in the filing.
The company recently has announced other moves to reverse its fortunes, by reducing costs. In August, the company said it would cut 15 percent of its work force and shift its headquarters to Memphis, Tenn.
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