Entertainment Gaming Asia is considering a reverse stock split to boost its ailing stock price and prevent a delisting from Nasdaq.
The Hong Kong-based casino operator and slot machine and equipment supplier, which trades on the Nasdaq Capital Market under the ticker EGT, has until April 2015 to regain compliance with the exchange’s minimum listing requirement of US$1 in bid price per common share. The publicly traded portion of the shares must stay above $1 for at least 10 consecutive days during the grace period to ensure compliance.
The stock, 38% of which is held by a subsidiary of Lawrence Ho’s Hong Kong-listed Melco International Development, has traded over the last year in the range of $0.40-$1.68, closing in New York on Monday at $0.52. At average volumes of 35,000 or so shares, trading over the last three months has been sparse.
EGT noted in a statement that the issue “has no immediate impact on the listing” and said “it believes it has options available”.
“Management and the board of directors are evaluating these options to determine the optimal course of action,” the company said, including its “intent to cure the deficiency … by effecting a reverse stock split, if necessary”.
EGT operates around 1,700 machine games on a revenue-sharing basis, principally at the NagaWorld monopoly casino in Phnom Penh and in smaller venues in Cambodia and the Philippines. The company also owns Hong Kong-based Dolphin Products, a manufacturer of RFID and conventional casino currencies and table game equipment.
EGT expanded into operations two years ago with the opening of a small casino in the Cambodian town of Pailin on the Thai border and followed it in 2013 with the opening of a slots-only venue in the border town of Poipet. The Pailin casino was sold at a loss earlier this year.
