Telehealth company Amwell, formerly known as American Well, is grappling with a potential delisting from the New York Stock Exchange (NYSE) due to its sagging share price. The company disclosed on Thursday that it received a warning notice from the NYSE because the average closing price of its common stock fell below the exchange’s $1 per share minimum requirement.
Amwell has six months to rectify the situation and boost its share price above the $1 threshold. In a statement, the company assured investors that it is “addressing the deficiency before the deadline,” potentially including a reverse stock split subject to board and shareholder approval at its upcoming annual meeting.
This development marks a stark reversal for Amwell, whose market capitalization soared to nearly $6 billion at its peak, with shares trading above $42 each. As of Friday’s market close, the company’s shares were down to a mere $0.72, translating to a current market cap of roughly $208.6 million. Amwell emphasizes that the NYSE notice has no bearing on its ongoing business operations or its reporting obligations to the Securities and Exchange Commission.
Financial results reported in February 2024 revealed a concerning trend. Amwell’s revenue dipped by 6% year-over-year, falling from $277 million in 2022 to $259 million in 2023. Losses also showed a significant increase, rising from $272 million to $679 million. This dramatic rise in losses was largely attributed to $436 million in impairment charges stemming from the plummeting share price.
Despite workforce reductions implemented in late 2023 to control expenses, Amwell still anticipates losses between $160 million and $155 million in 2024, even with projected incremental revenue growth. However, the company paints a more optimistic picture for 2025, forecasting a 30% revenue increase and a roughly 70% improvement in adjusted EBITDA, resulting in a projected loss between $45 million and $35 million.
Amwell has long been a prominent player in the telehealth sector. Its high-profile initial public offering (IPO) during the pandemic’s peak saw a strong debut, with its $742 million offering exceeding expectations by 42%. However, a recent Axios report paints a less rosy picture, drawing on insights from former employees and insiders. These sources allege a series of strategic missteps made by the company since its IPO.
The report claims that Amwell’s rapid expansion in the face of heightened competition led to stretched resources, and that integrations with high-profile partners were poorly executed. Additionally, the report suggests that the company rushed sign-ups for its flagship Converge telehealth platform before ensuring the platform was fully functional.
Despite the current turbulence, Amwell reports recording 6.3 million total virtual visits throughout 2023. The company’s most recent financial quarter-end statements list approximately $372 million in cash and short-term securities. The coming months will be crucial for Amwell as it navigates the NYSE delisting threat, implements cost-cutting measures, and strives to deliver on its projected 2025 financial recovery.
