What’s going on with Sundial Growers (NASDAQ:SNDL) today? Shares of SNDL stock are up over 9% on the day amid a strong uptick in the S&P 500 and Nasdaq-100. Last year, Sundial was a favorite among the r/WallStreetBets community. Shares of the Canadian marijuana supplier surged as high as $3.96, driven by euphoric investors. However, Sundial has been unable to live up to the hype. Since then, SNDL stock has crashed more than 80% from its 2021 high.
SNDL Stock Has Until Feb. 7 to Reach $1
Making matters worse, the Nasdaq notified Sundial of a difficult ultimatum last August. If Sundial’s price can’t reach $1 by Feb. 7 for 10 consecutive days, then the company will face delisting from the Nasdaq exchange. Sundial was hit with this notice because the price of SNDL stock had stayed under $1 for 30 consecutive business days from June 25 to Aug. 6.
Today is Feb. 4, and Sundial is currently trading in the 50-cents range. Feb. 7 is less than two business days away, meaning that Sundial would have to almost double in value before the deadline. It is too late for Sundial to trade above $1 for 10 consecutive business days before the deadline.
Furthermore, this isn’t the first time that Sundial has been in danger of being delisted. The Nasdaq gave Sundial a similar notice in 2020, and Sundial was able to trade above $1 for two weeks. Additionally, Sundial consolidated its shares last November through a company buyback to avoid delisting.
What Will Happen If Sundial Gets Delisted?
Sundial’s management could have chosen to play the loophole game and initiated a reverse stock split. Companies who have been given the 180-day period also may be eligible for a second 180-day period, if they meet certain requirements. It is not clear yet exactly what will happen with Sundial Growers next week.
In the event of a delisting, Sundial will most likely trade on the over-the-counter (OTC) market. OTC stocks aren’t traded through an exchange, but instead through a network of dealers and brokers who negotiate with each other.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.