With its stock trading at just 65 cents a share, Imation Corp. was notified by the New York Stock Exchange that it no longer complies with standards required to have its stock listed on the exchange, Imation officials announced Monday.
The beleaguered Oakdale data-storage company, which recently sold its headquarters campus and said it is moving to California, has until Feb. 19 to tell regulators if it will present a plan to regain compliance. If it does, the plan must be submitted in the following 45 days.
In its letter, exchange officials said that Imation’s stock fell out of compliance for listing because the company’s average global market-capitalization was “less than $50 million over a consecutive 30 trading-day period and its stockholders’ equity [was] less than $50 million.”
As of Monday, Imation’s market capitalization was $24 million.
In another development, DataLocker Inc. announced that Imation’s IronKey data-encryption firm has been split into two, with DataLocker acquiring part of it and Kingston Digital the rest. When Imation bought IronKey in 2011, it hailed the business as a critical component to diversifying and improving Imation. Just last month, interim President Barry Kasoff said Imation would focus on IronKey and Nexsan Solutions, another newly acquired and growing data storage and data security firm.
Imation’s stock plummeted from $11.77 per share five years ago to $4.59 in May and has steadily fallen since. It closed Monday at 65 cents a share.
The IronKey divestiture is the latest unraveling of Imation.
Since spinning off from 3M Co. in 1995, Imation made and sold everything from cassette tapes, CDs and DVDs to magnetic tapes for corporate data storage, flash drives and external hard drives.
In recent years, as many data-storage products fell out of favor, the company shifted toward data security products. But the transition may have come too late and taken too long for many impatient investors.
During a prickly proxy battle last May, shareholders ousted three board members, including the board’s chairman and the company’s CEO. In their stead, shareholders elected three board nominees from the New York-based activist investor firm, The Clinton Group.
Since then, CEO Mark Lucas resigned, and the company fired most of the company’s other executives.
In September, Imation said it would “wind down” its non-European legacy “tape media,” its consumer storage and accessories business. It also ended a long-term agreement with Japanese electronics manufacturer TDK Corp., an arrangement that was once heralded as a growth engine.
Last month, Imation sold its Oakdale headquarters to Slumberland Inc. furniture and also sold its Memorex trademark and licenses.
With the sale of its IronKey operation, it is unclear what the final Imation will look like after it restructures. Current Imation officials could not be reached for comment.
Imation said in January that it will maintain a small office in Oakdale for the short term, but will relocate the bulk of its remaining business to Thousand Oaks, Calif. That is the home base of Nexsan.
Imation will release its results for the fourth quarter and full year 2015 on Feb. 29.