The New York Stock Exchange (NYSE) has begun the process of de-listing warrants for online car retailer Cazoo as a result of “abnormally low” price levels.
The NYSE revealed in a statement issued late last night (January 3) that it was immediately suspending trading in warrants for the online used car retailer, which trades under the ticker symbol CZOO WS.
Trading in the company’s Class A ordinary shares will continue, the statement said.
In a statement issued via Businesswire, the NYSE said: "The staff of NYSE Regulation has determined to commence proceedings to delist the warrants of Cazoo Group Ltd, each whole warrant exercisable for one Class A ordinary share — ticker symbol CZOO WS — from the NYSE.
"NYSE Regulation has determined that the Company’s warrants are no longer suitable for listing based on 'abnormally low' price levels."
A comment issued by Cazoo to AM stated: "The recent New York Stock Exchange announcement relates only to the delisting of warrants of Cazoo Group Ltd under the ticker symbol of CZOO WS. The warrants are being delisted due to the low price and volume trading levels. The listing status of our warrants does not impact the Company's Class A ordinary shares under the ticker symbol CZOO in any way which will continue to trade on the NYSE as normal."
Warrants are similar to a share option and can be used as an incentive to senior employees.
They give the holder the right to purchase stock, issued directly by a business, at a fixed price in future.
UHY partner David Kendrick said: “The announcement from NYSE is a totally separate issue to Cazoo’s share prices and trading. It will continue to trade on the New York Stock Exchange.
“However, it adds a further layer of negativity uncertainty for a company that has already suffered significant share price losses and is attempting to reshape its business model in a bid to become profitable.”
At close of trading yesterday, Cazoo’s share price stood at $0.18, representing a 96.5% decline in over the past 12 months.
The business was valued at £6.5bn when founder Alex Chesterman launched it on the Stock Exchange in August 2021 but its market now stands at just £110m.
Back in August AM reported that Cazoo was already in breach of NYSE rules which require listed companies to maintain an average closing share price of at least $1.00 over a consecutive 30 trading-day period or risk being delisted.
Cazoo's shares have remained below $1.00 since July 14, 2022, except for July 23 when they reached $1.01 and August 2 and 3, when their value reached $1.01 and $1.03, respectively.
After announcing a restructure to slash costs by £200m last summer, Cazoo has withdrawn from various European used car markets as it looks to focus its efforts in the UK.
In October it reported UK revenues of £347m from Q3 trading, which is a 103% increase versus Q3 2021.
Its retail car sales volume doubled year-on-year to 18,889 units, and retail GPU (gross profit per unit) strengthened to £488 from Q2's £309 a result of continued efficiency gains across buying, reconditioning and product.
Cazoo also sold 3,105 more used cars in the UK during Q3 than it had in Q2.
Speaking at the time, founder chief executive Alex Chesterman said: “Our balance sheet remains very strong with over £450m of cash and self-funded inventory at the end of September.
"Our business realignment plan announced in June, together with our decision in September to withdraw from mainland Europe, has ensured that we have a plan to reach profitability without requiring further external funding.
"Our strong growth and momentum in Q3 and our continued focus on cash preservation gives us great confidence in our ability to become the largest and most profitable used car retailer in the UK over time.”
AM has approached Cazoo for a comment regarding the delisting of its NYSE warrants, but has yet to gain a response.
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