Amid persistently low daily stock prices for Five Star Senior Living (Nasdaq: FVE), the Nasdaq stock exchange on Tuesday issued a stock delisting warning to the senior living operator.
The Newton, Massachusetts-based company’s stock price averaged less than $1 per share over the most recent 30-day trading period, threatening its continued listing on Nasdaq. By the time the markets closed Tuesday, Five Star was trading at $0.72 per share.
Five Star is among the largest senior living operators in the U.S., with 208 owned or leased and 75 managed senior living communities across 32 states as of August.
Under Nasdaq’s rules, Five Star now has 180 calendar days — or until April 22, 2019 — to reach the minimum bid price for listing. In order to regain listing compliance, Five Star must meet or exceed $1 per common share for a minimum of 10 consecutive business days during that period.
If Five Star can’t reach compliance by April 22 of next year, it may be afforded a second 180-calendar-day grace period, provided it meets the continued listing requirement for market value of publicly held shares and all other listing standards with Nasdaq — save for the $1 per share price minimum.
“We are monitoring the bid price of our common shares and are considering options available to us to achieve compliance with the minimum bid price continued listing standard,” Five Star wrote in an SEC filing about the delisting notice.
Five Star has in recent quarters encountered some industry headwinds that have buffeted its operations and bottom line. For the second quarter of 2018, the company logged a senior living occupancy rate of 81.4%, a 170 basis-point decrease from the 83.1% figure it saw during the second quarter of 2017.
“Obviously, this was a difficult quarter for Five Star and the senior living industry, as new units flood the market as a result of record new construction starts over the past year or two,” Five Star President and CEO Bruce Mackey said during the company’s second-quarter earnings call on Aug. 9. “That, combined with the decline in the growth rate of the 85-and-above age demographic, has created an operating environment that has not been seen in the industry for quite some time.”
Written by Tim Regan