Key Highlights

● ESS Tech (GWH) closed near $0.18 on Monday, down 15.95%, extending a slide in a stock trading far below $1.

● On September 24 the NYSE said it would begin delisting proceedings because ESS could not show it met a standard.

● ESS can request a review by a committee of the exchange's board within 10 Business days of the notice.

● A special meeting on October 16 will vote on a 1-for-8 to 1-for-30 reverse stock split, the proxy said.

ESS Tech (NYSE:GWH) closed near $0.18 on Monday, September 28, down 15.95% from about $0.21 on Friday. The energy-storage company's shares trade far below the $0.50 a share at which it sold stock in August. No company press release dated Monday was found, so this article does not attribute the day's decline to any single event. ESS develops iron flow batteries, long-duration storage that uses iron, salt and water to hold electricity for many hours for utilities and large energy users.

A Delisting Notice Days Earlier

On Thursday, September 24, the NYSE announced it would commence delisting proceedings against ESS common stock. The exchange said the company could not demonstrate it had regained compliance with a standard requiring either $50 million in stockholders' Equity or $50 million in average Market Value over 30 trading days. ESS may request a review by a committee of the exchange's board within 10 business days. The NYSE said it will announce a trading suspension if the company does not seek review, decides not to appeal, or loses at the committee stage, and would then apply to the SEC to remove the shares from listing.

Other Disclosed Items

According to a proxy statement, ESS will hold a special meeting on October 16 where stockholders will vote on a Reverse Stock Split of between 1-for-8 and 1-for-30, aimed at addressing the $1.00 minimum price standard, and on issuing shares on the exercise of warrants from an August private placement. Company releases show ESS closed a $3.2 million registered direct offering at $0.50 a share in August. The same proxy refers to a proposed business combination with a private company in the energy sector, first mentioned in a press release on August 6, and no further terms were found in this check.

Small Caps in a Tough Tape

Shares of very small companies often trade thinly, so modest orders can move prices sharply, and stocks priced below $1 can face exchange minimum-price standards. Breadth beneath the surface was poor. The Russell 2000 slipped 19.64 points, while the Nasdaq logged 461 new 52-week lows and just 50 new highs. The 10-year Treasury Yield climbed to about 5.24%, its highest level since 2007, and the 30-year yield reached its highest since 2004. Higher yields reduce the present value of profits expected far in the future, which tends to weigh on growth stocks.

What to Watch for ESS Tech

The next steps are whether ESS requests the committee review, any trading suspension notice from the NYSE, and the result of the October 16 vote. Updates appear in press releases and SEC filings. A reverse split reduces the number of shares outstanding and raises the per-share price in proportion, so it does not by itself change a company's total market value.

Key releases ahead include Tuesday's JOLTS Job Openings and consumer confidence, Wednesday's PCE inflation, Thursday's ISM Manufacturing and Friday's September employment report.