FuelCell Energy Inc (NASDAQ:FCEL) Avoids Delisting….For Now

[[tagnumber 0]][[tagnumber 1]]When we last covered FuelCell Energy Inc (NASDAQ:FCEL), its shares had already fallen below the $1.00 mark. And while this is hardly a big deal for stocks traded on the OTC Bulletin Board, it does become an issue when the stock is listed on the Nasdaq and is in danger of falling overboard.[[tagnumber 2]] [[tagnumber 0]]This bleak prospect is exactly what could have happened to FuelCell had it not been to the recently implemented 1–for–12 reverse stock split. As a result, FCEL opened the current session at $9.37 per share after closing at $0.82 yesterday. Thus, FuelCell‘s management have succeeded in preventing a possible delisting and subsequent relegation to a lower marketplace. However, the danger is not over yet and FCEL‘s disappointing performance today reveals just that.[[tagnumber 2]] [[tagnumber 0]]A few hours before the end of the session, FCEL is already down 17% to $8.11 per share. No matter how we look at it, FCEL is registering its biggest intraday slump in more than eighteen months. Were the stock to continue to lose value at this rate, it could even fail to remain above $1.00 for the next two weeks, which in turn is a prerequisite for preserving Nasdaq listing.[[tagnumber 2]] [[tagnumber 0]][[tagnumber 8]]As it seems, the reverse split is aimed at buying the management the time they need to get the business back on its feet. Yet, this will only work if FCEL shares do not fall below $1.00 for the next 10 days of trade. Was the reverse split big enough to guarantee that, though?[[tagnumber 2]] [[tagnumber 0]]On the one hand, yes it was. The company decreased the number of its outstanding shares from 314.5 million to 26.2 million. What is more, the split referred to FCEL‘s authorized stock, too, with the latter shrinking from 475 million to 39.6 million. This move is essential because most companies tend to only apply this to their outstanding stock while the authorized shares remain intact. Needless to say, dilution prospects soar sky high in such cases. Not for FCEL investors, though. By reducing both its O/S and A/S at the same time, FuelCell‘s managers have more or less eliminated the risk of dilution and this is the first task that has been successfully completed.[[tagnumber 2]] [[tagnumber 0]]The second (and more important) task, however, is to achieve a breakthrough from a fundamental standpoint. The expansion of FuelCell‘s Connecticut manufacturing facility announced on Nov. 19 could potentially bring about a rebound on the charts should it be combined with increased sales in the months to come.[[tagnumber 2]]