Online used car dealer Vroom is to effect a reverse stock split to avoid being kicked off the Nasdaq exchange.

Earlier this month, the Nasdaq warned Houston-based Vroom that it could lose permission to trade on the exchange due to its shares trading below the market’s $1.00 price threshold for more than 30 days, according to a company announcement.

The company has scheduled a board meeting for Feb. 5 to authorize a reverse split that would bump the share price above the threshold.

Like other digital auto retailers, Vroom thrived during the pandemic lockdowns, which weighed on traditional dealerships. Vroom’s share price almost doubled — from $22 to $40 — on the day it made its market debut (June 9, 2020) and peaked later that summer at more than $65 per share.

However, a reversal in the fortunes of in-person dealerships as the pandemic threat waned, rising interest rates and increased new car inventory have since devastated online used car sales. 

For Q3 2023, Vroom posted revenue of $236 million, down by 30.9% year on year, and a net loss of $82.9 million.

At the time of writing, Vroom’s share price stood at just $0.60 — 99% off its peak — giving it a market cap of $84.2 million.

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