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Music streaming service Anghami made historical past in 2022 when it turned the primary Arab tech firm to record on the Nasdaq. Now, that historic itemizing is in danger.
In keeping with a filing with the SEC, the Abu Dhabi-headquartered firm has obtained a notification from the Nasdaq change that it’s in violation of Nasdaq itemizing guidelines – as a result of its inventory worth is simply too low.
Nasdaq guidelines require listed companies to keep up a minimal share worth of USD $1. If the value falls beneath that stage for 30 consecutive days, the change can launch a evaluate of the listed firm that can lead to delisting.
Below these guidelines, Anghami has 180 days to regain compliance. If its share worth closes above $1 for 10 consecutive days throughout that interval, the Nasdaq will contemplate the matter closed, Anghami mentioned in its submitting to the SEC.
“Ought to the state of affairs not resolve itself in the course of the 180 calendar day compliance interval, the corporate intends to think about out there choices to remedy the deficiency and regain compliance with the minimal bid requirement inside the compliance interval, together with by doubtlessly approving a reverse share break up,” Anghami mentioned within the submitting, including that sustaining its Nasdaq itemizing is a “key precedence” for the corporate.
The event highlights a protracted market decline for Anghami, which listed on the Nasdaq in February 2022 after finishing a SPAC merger with Vistas Media Acquisition Firm (VMAC) that valued Anghami at $220 million.
The newly public firm’s share worth spiked as a lot as 82% on its first day of buying and selling, to inside a hair of $18 per share, earlier than starting a protracted decline that resulted in its share worth falling beneath $1 in mid-August. On the time of writing on Monday (October 16), Anghami shares have been buying and selling at $0.85 (see beneath).
Based mostly on its present share worth, Anghami’s market capitalization is now round $22.2 million, or a few tenth of its valuation on the time of the SPAC merger.
Launched in 2012, Anghami has constructed itself into what it calls the “first, most established and quickest rising music expertise platform within the Center East and North Africa area,” with 120 million registered customers and – as of the time of the corporate’s full-year 2022 report – 1.52 million paying subscribers.
“The Firm intends to think about out there choices to remedy the deficiency and regain compliance with the minimal bid requirement inside the compliance interval, together with by doubtlessly approving a reverse share break up.”
Anghami
The corporate boasts the biggest digital music catalog within the MENA area, with 100 million songs and different gadgets of licensed content material, and operates in 16 MENA nations from workplaces in Abu Dhabi, Beirut, Dubai, Cairo and Riyadh.
In its 2022 earnings launch, the corporate reported a 35.6% YoY improve in income, to a complete of $48.1 million. Whole paying subscribers grew by 21% YoY.
Its Q1 2023 earnings confirmed its gross revenue margin rising to 23%, from 17% in the identical quarter a yr earlier. That translated right into a $3.1-million (or 60%) YoY enchancment in EBITDA.
Nevertheless, Anghami has additionally been engaged in cost-cutting measures, asserting in November 2022 that it had reduced headcount by 22%. Given the corporate’s worker depend of 174 on the finish of 2021, that implied someplace round 40 redundancies.
The corporate additionally introduced that it had lowered its cloud computing prices by 19%.
“Given the impression of difficult macroeconomic circumstances, we needed to take some value disciplinary measures to enhance our bottom-line efficiency,” Anghami CEO and Co-Founder Eddy Maroun mentioned on the time.
Experiences swirled round this time that Anghami’s bigger rival, Spotify, was looking to acquire the company. One information supply alleged that Anghami’s inventory market debut through a SPAC merger was meant to speed up the method of a Spotify buyout.
Whereas the Spotify acquisition by no means materialized, Anghami did get a $5-million increase from an investment by SRMG Ventures, the enterprise capital arm of Saudi Analysis and Media Group (SRMG), which calls itself the “largest built-in media group in MENA.”
The funding will permit Anghami to “leverage SRMG’s in depth media community to speed up its progress by creating new experiences for customers and alternatives for artists, and collaborating to develop the authorized consumption of music and audio content material within the MENA area,” the streaming service mentioned.Music Enterprise Worldwide
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