Avionics maker Rada Electronic Industries Ltd. (Nasdaq: RADI) announced that it will make a 3-to-1 reverse stock split, effective February 14. The company has a market cap of $21 million. The share fell sharply after the announcement, although that was not necessarily the cause.
On Thursday, Minister of Defense Amir Peretz announced the selection of Rafael Armament Development Authority Ltd.’s defense system against Katyusha and kassam rockets. Rada is a partner of Northrop Grumman Corp. (NYSE:NOC), which was competing against Rafael. The rejection of Northrop Grumman’s proposed system adversely affected Rada.
Last September, the Nasdaq management notified Rada that it did not meet the threshold conditions for listing on the SmallCap index, because it share had traded below $1 for 30 consecutive trading days. The company was given 180 days, through February 27, 2007, to boost its share price above the $1 threshold for at least ten consecutive trading days.
Rada was unable to meet this condition. Since September, the share rose above $1 twice, but fell back. To prevent delisting, the company therefore decided on the reverse split, thereby raising its share price above the threshold.
Published by Globes [online], Israel business news - www.globes.co.il - on February 5, 2007
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