SeaChange International, the provider of video delivery and advertising solutions, announced its plans to deregister its common stock with the U.S. Securities and Exchange Commission (SEC) and delist its shares from the Nasdaq Stock Market. The news resulted in a significant drop in SeaChange’s shares, with a 40% decline in premarket trading on Tuesday.
Strategic Alternatives Process
Last year, SeaChange initiated a strategic alternatives process, which included the possibility of a sale. However, after evaluating all the proposals received, the board concluded that they undervalued the Boston-based company. As a result, SeaChange has decided to focus on executing its standalone plan.
Cost Savings and Trading Outlook
Deregistering and delisting its shares is expected to provide SeaChange with annual savings of approximately $3 million. The company’s last trading day on Nasdaq will occur on or around August 28.
While SeaChange anticipates that its shares will be quoted on the OTC Expert Market, there is no guarantee that trading in any over-the-counter market will be maintained.
Market Impact
SeaChange’s shares closed at $7.87 on Monday, but following the news, they experienced a significant drop. In premarket trading, the stock fell by 40% and was trading at $4.72.
