Shares of Irvine’s Mossimo Skid to an All-Time Low
Shares of beleaguered apparel designer Mossimo Inc. fell to an all-time low in New York Stock Exchange trading Thursday, cutting the Irvine concern’s market value to just $25 million.
The company’s continuing stock slide has put it below one NYSE listing requirement that companies maintain a market value of at least $40 million.
It isn’t clear if Mossimo’s shrinking market value will result in the company being de-listed, a rare event on Wall Street’s biggest stock exchange.
An NYSE spokesman said the exchange does not comment on specific companies, and Mossimo executives didn’t return phone calls Thursday.
The company does meet several other NYSE listing requirements, including an average monthly trading volume of 100,000 shares, and having at least 1.1 million shares outstanding.
Mossimo closed Thursday at $1.69, down 19 cents, a far cry from the enthusiasm that met its initial public offering in February 1996.
The company’s shares rose 39% in first-day trading, to $25, and soared to $50 by June, making it one of the most celebrated IPOs of that year. At $50, the company had a market value of $750 million, making founder Mossimo Giannulli’s 69% stake worth nearly $520 million.
When trading opened this morning, Giannulli’s stake had shrunk to $17.5 million.
As recently as a year ago, the company’s stock traded at $11.75, giving it a market capitalization of more than $176 million.
Mossimo’s stock decline comes amid continued turbulence in U.S. equities markets, prompted in part by concerns over corporate earnings.
On Thursday, U.S. stocks tumbled for a second day, sending the Dow Jones Industrial Average down 249 points, as worries deepened that ailing economies in Asia, Russia and Latin America will erode domestic corporate profits.
Since peaking on July 17, the U.S. stock market has lost $2.4 trillion, or 19.3% percent of its value.
Shares of other publicly traded companies in Orange County haven’t escaped the downdraft. The Bloomberg Index of 145 stocks fell for the fourth consecutive day Thursday, after hitting a 52-week low last week. Eighty-three companies saw their share prices fall Thursday, while only 35 rose. Twenty-seven others were unchanged.
Mossimo, which got its start in trendy beachwear, has been struggling to regain its footing after an unsuccessful attempt to expand into upscale fashions.
Last month, the company reported that it lost $6.1 million in the second quarter as sales declined 35%, to $11.4 million. The results included restructuring costs totaling $3.8 million to cover the closing of some operations and other downsizing moves.
Mossimo’s troubles led to a management shake-up earlier this year, when turnaround veteran John Brincko signed on as chief executive, replacing Giannulli, who remains chairman and took on the new title of “visionary.”
