Down 72% in 2022, Livetiles shares are now delisting from the ASX, here’s why

A man packs up a box of belongings at his desk as he prepares to leave the office.

A man packs up a box of belongings at his desk as he prepares to leave the office.

It’s been a day of red ink for ASX shares so far this Tuesday. Breaking with a five-day winning streak so far today, the All Ords is currently down by 0.41%. But it’s been dramatically worse for the Livetiles Ltd (ASX: LVT) share price.

Livetiles shares have plunged in value today. The ASX tech share is presently down by a painful 52.54% at just 2.8 cents per share at the time of writing. We do not have to look too far to see why ASX investors are abandoning this company.

Before today, Livetiles shares had actually been in a trading halt since Thursday last week. Before that, the company’s shares had been under increasing pressure following a disappointing quarterly update delivered on 25 July.

Livetiles did report a 17% increase in operating revenues against FY2021. However, its cash receipts for the three months ending 30 June came to $12.9 million, a year-on-year decline of 11%.

Upon the release of this update, Livetiles shares fell by more than 30%. As of today, the company is now down by close to 70% since 22 July. It’s also down by 72% over 2022 thus far.

Following the release of this update, on Thursday 28 July the company requested a trading halt “pending it releasing an announcement”. Well, we now know what this announcement is.

Livetiles shares are leaving the ASX

This morning, the company revealed it is “voluntarily delisting” from the ASX boards.

Here’s why Livetiles stated it is abandoning its public listing:

The Delisting is considered by the Company’s Board (Board) to be in the best interests of the Company for a number of reasons, including underperformance of the trading price of the Company’s shares, relatively low levels of trading liquidity and a number of flow on consequences…

These factors, as well as the costs and administrative burden of remaining listed on ASX, outweigh the benefits associated with remaining listed.

The company also declared that “the trading price of the Company’s shares in recent years implies a valuation that has been (and remains) consistently and materially lower than the valuations of unlisted companies of a comparable nature and stage to LiveTiles”.

It also notes that “LiveTiles is well funded and has no intention to raise equity capital in the near term”. But any future capital raising will be easier as a private company.

Livetiles will hold a general meeting on 5 September. This will allow shareholders to vote to approve this delisting. If that goes ahead as planned, Livetiles shares will be suspended from the ASX on 6 October and delisted the following day.

The post Down 72% in 2022, Livetiles shares are now delisting from the ASX, here’s why appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended LIVETILES FPO. The Motley Fool Australia has recommended LIVETILES FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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