SmartRent's NYSE Listing Warning: Can a Reverse Split Save the Day?

SmartRent, Inc. (NYSE: SMRT) faces a critical juncture after receiving a notice from the New York Stock Exchange (NYSE) on May 2, 2025, citing non-compliance with its Section 802.01C listing standard. The issue stems from the company’s Class A common stock averaging a closing price below $1.00 over 30 consecutive trading days—a technical requirement that now threatens its NYSE listing. With a six-month cure period to act, smartrent must navigate volatile markets, investor sentiment, and potential structural changes to avoid delisting. Here’s what investors need to know.

The Listing Violation: A Technical Setback, Not a Financial Death Knell

The NYSE’s notice is purely a price-related compliance issue, not a reflection of SmartRent’s operational or financial health. The company’s stock fell below the $1.00 threshold for 30 straight days, triggering the warning. To regain compliance, SmartRent must achieve both of the following by November 2, 2025:
- A closing price of at least $1.00 on the last trading day of any calendar month.
- An average closing price of at least $1.00 over the preceding 30 trading days.

This creates a moving target: compliance could be achieved as early as the end of May 2025 if conditions align.

The Cure Options: Reverse Split or Bust?

SmartRent’s most viable path to compliance is a reverse stock split, a common tactic for companies facing similar NYSE warnings. A reverse split reduces the number of shares outstanding, artificially boosting the stock price. For example, a 1-for-5 reverse split would combine five shares into one, multiplying the price by five. However, such a move requires board and shareholder approval, adding procedural hurdles.

Critically, a reverse split does not guarantee success. It could temporarily inflate the stock price but might also signal desperation to investors, further eroding confidence. The company’s ability to stabilize investor sentiment and demonstrate underlying business value will be key.

Ask Aime: Can SmartRent regain its NYSE listing by November 2, 2025?

The Stock’s Struggles: A Rocky Road Ahead

The data paints a bleak picture. SmartRent’s stock closed at $0.96 on May 1, 2025, dipping to $0.97 the next day—the day the NYSE notice was issued. While the stock briefly spiked to $1.04 on May 2, it quickly retreated. The trading volume surged to 1.75 million shares on May 2, up 118% from May 1, indicating heightened investor attention—likely driven by the notice and anticipation of the Q1 2025 earnings report scheduled for May 7.

This chart would show a steady decline from a high of $1.81 in February 2025 to its current sub-$1.00 levels, underscoring the steep challenge ahead.

Q1 2025 Earnings: A Lifeline or Another Blow?

The upcoming earnings report on May 7 could be a turning point. If SmartRent delivers strong financial results, such as revenue growth or margin improvements in its smart home technology business, it might ignite a buying frenzy. However, given the stock’s prolonged weakness, even positive results may not be enough to push the average above $1.00 quickly.

Conversely, weak earnings could deepen the crisis, accelerating the stock’s decline and making a reverse split more likely.

SmartRent’s Business: A Niche Market with Potential

SmartRent operates in the smart home technology sector, specializing in IoT solutions for multifamily housing, such as energy management systems and resident Wi-Fi. Its customer base includes major rental operators, and its technology is a growing necessity in the competitive rental market.

The long-term demand for smart building solutions is robust, but execution remains key. The company’s ability to scale operations, secure new contracts, and manage costs will determine whether its fundamentals justify a higher valuation—and thus a higher stock price.

Risks and Considerations

• Delisting Risks: If compliance isn’t achieved by November 2, SmartRent’s stock would be suspended, followed by delisting. This would reduce liquidity and investor access, potentially leading to a sharp price drop.
• Reverse Split Backlash: A reverse split could alienate shareholders who see it as a last-ditch effort. Smaller investors might sell, exacerbating the price drop.
• CEO Leadership: While not mentioned in the notice, SmartRent’s 2023 CEO resignation and subsequent leadership changes add to governance concerns.

Conclusion: A Race Against Time

SmartRent’s path forward is narrow but not impossible. To avoid delisting, it must either:
1. Boost its stock price organically through strong earnings, strategic partnerships, or product innovations, or
2. Execute a reverse split swiftly, with transparent communication to mitigate investor skepticism.

The clock is ticking. With just six months to act, the company’s fate hinges on its ability to stabilize investor confidence and meet NYSE’s technical requirement. For shareholders, the stakes are high: delisting would likely mark the end of institutional investment and further shrink liquidity.

Investors should monitor the May 7 earnings report closely. A surprise revenue beat or margin expansion could spark a rally. Conversely, a miss would amplify delisting fears. Meanwhile, the stock’s current price—hanging near $1.00—leaves little room for error.

In the end, SmartRent’s story is a microcosm of the challenges facing small-cap tech stocks in volatile markets: one misstep can unravel years of progress. The next six months will test whether this company can turn its technical listing issue into a strategic comeback.

This chart would highlight the company’s underperformance relative to broader market trends, emphasizing the uphill battle ahead.