Hovnanian Enterprises, Inc. (NYSE: HOV) announced Wednesday that it has received written notification from the New York Stock Exchange that it has fallen out of compliance with its continued listing standard, which, if not met, could result in the eventual delisting of the company's stock.
Section 802.01B of the NYSE's listed company manual requires average global market capitalization of at least $50 million. As of July 11, 2019, Hovnanian's 30 trading-day average global market capitalization was approximately $49.5 million.
In a press release, the company stated, "In accordance with the NYSE rules, the company intends to notify the NYSE within 10 business days of receipt of the notice that it intends to submit a plan within 45 days from receipt of the notice advising the NYSE of definitive action the company has taken, or is taking, which would bring the company into conformity with the NYSE's continued listed standards within 18 months of receipt of the notice. The NYSE will review the plan and, within 45 days of its receipt, determine whether the company has made a reasonable demonstration of an ability to come into conformity with Section 802.01B in the 18-month cure period. If the NYSE accepts the plan, Hovnanian's Class A common stock will continue to be listed and traded on the NYSE during the 18-month cure period, subject to the company's compliance with other continued listing standards, and the company will be subject to quarterly monitoring by the NYSE for compliance with the plan."
It continued, "The notice has no immediate impact on the listing of Hovnanian's Class A common stock, which will continue to trade on the NYSE during the applicable cure period, subject to the company's compliance with the other listing requirements of the NYSE. The notice does not affect the ongoing business operations of Hovnanian, compliance with its debt instruments or its reporting requirements under the rules and regulations of the SEC."
Hovnanian avoided a possible delisting in March due to its low share price when it effected a reverse stock split.