Nakamoto (NAKA), a publicly traded Bitcoin treasury firm, has announced plans to execute a 1-for-40 reverse stock split after obtaining shareholder approval in an effort to maintain compliance with Nasdaq’s listing rules. This strategic decision aims to elevate the firm’s share price back to the required minimum of $1.00, meeting the exchange’s listing standards.
The announcement follows a challenging financial period for Nakamoto, as shares plummeted to a record low last week, coinciding with the company reporting significant losses of approximately $239 million for the first quarter. These losses can be attributed to the declining price of Bitcoin, which has put additional pressure on the firm’s stock value. The stock price has continued to wane, dropping 7.5% on Wednesday to approximately $0.158, even hitting a new all-time low of $0.145 at one point during the trading session.
In after-hours trading, shares recovered by 2.6%, but this increase does not mitigate the overall downturn, with the stock still more than 99.5% below its 52-week peak of $34.77.
The decision to enact the reverse stock split came after a special shareholder meeting held on May 8, where shareholders approved a split ranging from 1-for-20 to 1-for-50. As a result of the upcoming reverse stock split, the total number of outstanding shares will decrease from 696.1 million to approximately 17.4 million, with the split expected to take effect on May 22.
Despite the financial setbacks, Nakamoto retains a substantial Bitcoin balance of over 5,000 BTC, which is currently valued at more than $388 million. However, the firm has been liquidating portions of its holdings in recent quarters, selling roughly $20 million worth of Bitcoin in the fourth quarter and approximately $22 million in the first quarter, as indicated in its recent earnings report.
In the wider cryptocurrency market, Bitcoin has experienced a slight uptick of 1.6% over the past 24 hours, trading around $77,927. While the digital asset has bounced back by over 2% in the last month, it remains more than 38% below its all-time high of $126,080 recorded in October.
