Shares of American Bitcoin (ABTC), a cryptocurrency mining company linked to the Trump family, plummeted to an unprecedented low on Wednesday, prompting the company to announce a 1-for-15 reverse stock split. This strategic move is intended to keep the company listed on the Nasdaq, where it is at risk of delisting due to persistently low trading prices.
The reverse stock split will take effect after the market closes on Thursday, with trading resuming on a split-adjusted basis on Monday. Under this plan, every 15 shares of the company’s Class A and B common stock will be consolidated into a single share, reducing the total outstanding shares from over 1 billion to approximately 73 million. The stock will continue to trade under the ticker ABTC.
Typically viewed as a sign of financial trouble, a reverse stock split aims to artificially inflate a company’s share price. American Bitcoin indicated that this action was necessary to comply with Nasdaq’s minimum bid requirements, which mandate a closing price above $1 for a span of 30 consecutive trading days. Shareholders had previously approved the measure during a vote on June 22.
On Wednesday, shares in American Bitcoin dropped nearly 8.4%, closing at 62 cents—a new all-time low for the stock. Following hours of after-market trading, the share price saw a minor uptick, rising 4.5% to 65 cents. Since the beginning of the year, the stock has decreased by more than 63% and has seen a staggering decline of over 92% since its Nasdaq debut on September 3.
American Bitcoin was co-founded last year by Donald Trump’s sons, Donald Trump Jr. and Eric Trump. The company went public following a merger with Gryphon Digital Mining, with the Trump siblings and Canadian crypto miner Hut 8 collectively holding around 98% of the combined enterprise.
The significant drop in American Bitcoin’s stock is set against the backdrop of a broader downturn in the cryptocurrency market. The company reported losses of $81.7 million in the first quarter of the year. In line with similar trends, other cryptocurrency firms have also resorted to reverse stock splits in efforts to bolster their stock prices. For instance, Bitcoin financial services provider Nakamoto completed a 1-for-40 reverse stock split in May after its share price fell as low as 16 cents.
As for Bitcoin (BTC), it was trading at approximately $60,000 early Thursday, down 32% for the year and more than halved from its peak of over $126,000 in October, as reported by CoinGecko.
