Tile Shop Holdings is holding a special shareholder meeting Wednesday to decide whether to take the company private.
The small retail chain first went public in 2012, but its stock since then has gone down 14.5% in value, shares have been thinly traded and financial performance has been inconsistent.
In other words, it has not benefited from trading on the Nasdaq public market. So the Plymouth company’s board has approved a “going dark” transaction where it would deregister as a public company with the Securities and Exchange Commission.
“We have not raised capital from the public markets, effectively used our common stock as deal consideration or otherwise attracted interest from institutional investors or market analysts,” the company said in the proxy.
Shareholders will vote on a reverse stock split that would cash out small shareholders and reduce the total number of shareholders to fewer than 300, a threshold requirement of the SEC for public companies.
The move would save the company $2.4 million a year in costs associated with being a public company, the company said in a news release.
“The company has not realized, and in the board’s view likely never will in the future realize, any of the traditional benefits of public company status,” the company said in a filing with the Securities and Exchange Commission.
Tile Shop, with 140 stores, had a surge in 2020 and 2021 when the pandemic had people investing in home renovations. But it has struggled since and company sales have declined for 12 straight quarters.
