Rotech continues free-fall

ORLANDO, Fla. - Things have gone from bad to worse for Rotech Healthcare, industry watchers say. On Nov. 16, the NASDAQ notified Rotech (ticker symbol: ROHI) that it's in danger of being de-listed from the stock market for not meeting a minimum market value of $15 million. The provider, which, at press time, was valued at $12.75 million, has until Feb. 18 to regain compliance. Few industry watchers were surprised by the news. “They've been free-falling for some time,” said Balaji Ghandi, an analyst with Oppenheimer & Co. Despite recent rounds of funding, Rotech's stock price slid in 2007 from a high of $3.52 in January to $0.51 in late November. If it's de-listed, Rotech's days of rounding up funding may be over, industry watchers said. “In terms of its primary effect, institutional investors can't or won't invest in companies that aren't listed,” said Rick Glass, president of Steven Richards & Associates, an M&A firm. Rotech showed a glimmer in 2007 that it had the potential to turn the corner, industry watchers said. In April, the provider received $160 million from Credit Suisse. But Rotech can't seem to shake the continued uncertainty surrounding Medicare reimbursement, they said. “It's a general malaise affecting all of home medical equipment,” said consultant Schuyler Hoss, president of Northwest Healthcare Management. “There's no clear sign which way things will go.” It's not impossible for Rotech to regain NASDAQ compliance, but industry watchers wonder whether there's anything left worth fighting for. “When you're talking $15 million, it doesn't take much to move the needle—just one call to an investor,” said Ghandi.