In a significant corporate move, publicly traded Bitcoin treasury firm Nakamoto (NAKA) has announced a 1-for-40 reverse stock split following shareholder approval. This strategic decision is aimed at elevating the company’s share price to at least $1.00, a necessary threshold to comply with Nasdaq’s minimum bid price requirement. Currently, NAKA shares have plummeted to distressing lows, trading around $0.158 and even reaching a new low of $0.145 during recent trading sessions, marking a staggering decline of over 99.5% from their 52-week high of $34.77.
The reverse stock split comes on the heels of a challenging financial quarter for Nakamoto, which reported losses of approximately $239 million in Q1. This substantial loss primarily stems from the decline in Bitcoin’s market price, significantly impacting the firm’s overall performance. The company’s shares have experienced a further drop of 7.5% on Wednesday, prompting this drastic response.
The decision to conduct the reverse stock split was backed by stockholders during a special meeting held on May 8, where they approved a range between 1-for-20 and 1-for-50. Following this decision, the outstanding shares of Nakamoto will decrease from 696.1 million to approximately 17.4 million, with the reverse split expected to take effect on May 22.
Despite the current turbulence, Nakamoto still maintains a substantial Bitcoin reserve exceeding 5,000 coins, which is valued at over $388 million. However, the firm has sold portions of this treasury in the last two quarters, parting with around $20 million worth of Bitcoin in Q4 and an additional $22 million in Q1, according to their recent earnings report.
In the broader market, Bitcoin itself has seen a slight uptick, rising 1.6% over the past 24 hours and currently trading around $77,927. While it has witnessed a modest gain of over 2% in the past month, the cryptocurrency remains over 38% below its previous all-time high of $126,080, recorded in October.
The implications of Nakamoto’s reverse stock split and the state of the Bitcoin market will be closely monitored by investors and analysts following these critical developments.
