Shares of Sleep Number Corporation will no longer be publicly traded after next week.
In a filing with the Securities and Exchange Committee (SEC), the embattled mattress and bedding company confirmed that its stock (Nasdaq: SNBR) will be delisted from the Nasdaq after it had received written notice from the exchange’s listings qualifications staff.
The company’s stock will be delisted when the market opens on Tuesday, June 23.
The news follows Sleep Number’s Friday, June 12, voluntary filing for Chapter 11 bankruptcy.
In its delisting announcement, Sleep Number stated, “Nasdaq’s determination was based on the filing of the Chapter 11 Cases and associated public interest concerns raised thereby, concerns regarding the residual equity interest of common stockholders and concerns about the Company’s ability to sustain compliance with all requirements for continued listing on Nasdaq.”
As for current stockholders, Sleep Number says its “common stock may be quoted on over-the-counter markets, although the Company does not provide any assurance regarding whether the common stock will trade on such markets, whether broker-dealers will provide quotes for the common stock or whether an efficient market for the common stock will develop.”
Sleep Number’s shares fell more than 50% in after-hours and into premarket trading on Thursday. At close on Wednesday, the company’s shares were already over 95% down year-to-date (YTD).
The delisting isn’t expected to impact the Chapter 11 proceedings.
“A complete or significant loss on their investment”
Sleep Number sought Chapter 11 bankruptcy protection due to what its CEO and president, Linda Findley, called an “unsustainable” capital structure.
“While we have made meaningful progress advancing our turnaround efforts and strengthening our operations, our capital structure remains unsustainable,” Findley stated.
Now, Sleep Number will merge with Sleep Country Canada to create a large North American mattress and bedding company. Sleep Number expects to receive up to $260 million of debtor-in-possession financing from declaring bankruptcy.
“[We] are confident that moving forward with the Sleep Country Canada agreement and this court-supervised sale process will enable us to address our financial constraints,” Findlay added. “It will also position us to expand our business, helping more people achieve their best sleep both in the United States, and through future international expansion.”
However, this is not necessarily great news for current shareholders.
In its announcement, Sleep Number said it “expects that holders of shares of the Company’s common shares will experience a complete or significant loss on their investment, depending on the outcome of the Chapter 11 Cases.”
Sleep number plans to have its brick-and-mortar and online stores operating as usual during this process.