View, Inc. (VIEW) designs, manufactures, and sells smart building products and related technology services. Its diverse product portfolio includes View Smart Glass, View Sense, View Net, and View Immersive Experiences. The Milpitas, Calif., company went public through an SPAC deal with blank check company CF Finance Acquisition Corp. II on March 9, 2021, raising $1.50 billion.
However, VIEW had a lukewarm stock market debut; its stock dipped 3% in price intraday during its first trading session. The company has an ISS Governance QualityScore of 9, indicating high governance risk.
VIEW has failed to publish quarterly reports for the last four quarters, and it recently withdrew its registration statement from SEC through an RW filing. As a result, the stock has declined 76.1% in price over the past year and 50.6% year-to-date.
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Here is what could shape VIEW’s performance in the near term:
Delisting Concerns
On February 15, VIEW received a staff delisting determination from the listing qualifications department of the Nasdaq Stock Market LLC. This delisting determination was issued because the company failed to file its quarterly reports with the SEC for the periods ended June 30, 2021, and September 30, 2021, on or before their extended due dates. Nasdaq’s listing qualifications department has initiated a process to delist VIEW shares from the Nasdaq stock exchange.
On February 22, VIEW appealed the staff delisting determination and presented its plans to regain compliances under the applicable listing requirements. Such a request automatically stayed the listing request for a period of 15 days, as per the Nasdaq listing rules. Also, VIEW required a further stay in the delisting determination pending the resolution of the company’s appeal.
Withdrawal from the SEC
VIEW stated on January 4 that it would file its delinquent quarterly reports and annual report for the year ended Dec. 31, 2021, within the first quarter of 2022. However, the company failed to do so and hence, filed form RW with the SEC on March 2.
As per rule 477 of the Securities Act of 1933, VIEW filed form RW to withdraw its registration statement on Form S-1, together with all exhibits, to be withdrawn. This is because the company failed to finalize its financial statements or corresponding assessment of the effectiveness of its disclosure protocols and procedures and internal control over financial reporting for various periods.
Lawsuits
Several law firms are currently investigating whether VIEW’s board of directors violated federal securities laws, breached their fiduciary duties to shareholders, and/or grossly mismanaged the company in connection with the adequacy of its previously disclosed warranty accrual. According to a class action complaint filed against VIEW, the company stated that it had recorded a one-time warranty accrual of $24.50 million for the nine months ended Sept. 30, 2019.
These investigations began after VIEW’s statement on August 16 last year, announcing that it started an independent investigation concerning the adequacy of its previously disclosed warranty accrual.
POWR Ratings Reflect Bleak Prospects
VIEW has an overall D rating, which translates to Sell in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
The stock has a D for Stability and Quality. Its relatively high 2.22 beta justifies the Stability grade. In addition, the company reported negative profit margins in its fiscal first quarter, ended March 31, 2021 (last reported quarter), in sync with the Quality grade.
Among the 52 stocks in the B-rated Industrial – Building Materials industry, VIEW is ranked #49.
Beyond what I have stated above, see VIEW ratings for Growth, Sentiment, Momentum, and Value here.
Bottom Line
Despite being a leading smart glass manufacturer, VIEW’s mismanaged operations and non-compliance with the SEC and Nasdaq rules will likely cause the stock to be delisted soon. Thus, we think VIEW is best avoided now.
How Does View (VIEW) Stack Up Against its Peers?
While VIEW has a D rating in our proprietary rating system, one might want to consider looking at its industry peers, Huttig Building Products, Inc. (HBP) and Chase Corporation (CCF), which have an A (Strong Buy) rating.
Note that HBP is one of the few stocks handpicked by our Chief Growth Strategist, Jaimini Desai, currently in the POWR Stocks Under $10 portfolio. Learn more here.
VIEW shares were trading at $2.08 per share on Tuesday morning, up $0.15 (+7.51%). Year-to-date, VIEW has declined -46.80%, versus a -3.93% rise in the benchmark S&P 500 index during the same period.
About the Author: Aditi Ganguly
Aditi is an experienced content developer and financial writer who is passionate about helping investors understand the do’s and don'ts of investing. She has a keen interest in the stock market and has a fundamental approach when analyzing equities.
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