Allarity Therapeutics (NASDAQ:ALLR) stock is sliding lower on Friday after announcing a reverse stock split.
According to a press release, the company plans to enact a 1-for-35 reverse stock split. That split will go into effect today shortly after the market closes. This will see the stock trade on a post-split-adjusted basis when markets open on Monday.
Allarity Therapeutics notes that its shares will continue to trade under the ALLR stock ticker after the reverse split. It also mentions that the new CUSIP number for its shares will be “016744203.”
Why Is ALLR Stock Getting a Reverse Split?
Allarity Therapeutics is going through a reverse stock split as a way to increase the price of its shares. The company is doing this to regain compliance with the Nasdaq Exchange’s $1 minimum listing rule. Shares of ALLR stock closed out trading on Thursday at $0.113.
Shareholders of ALLR stock approved the reverse split during a special shareholder meeting on March 20. That allowed the company’s board of directors to enact a split at a ratio between 1-for-20 and 1-for-35.
While a reverse stock split doesn’t change a company’s market capitalization, it does sometimes hurt a stock. Reverse stock splits don’t always inspire confidence in traders, which can result in dips like ALLR is seeing today.
ALLR stock is down 23.3% as of Friday morning.
Investors looking for more of the latest stock market news will want to keep reading!
InvestorPlace has all of the hottest stock news traders need to know about on Friday! That includes why shares of BGSF (NYSE:BGSF), Bird Global (NYSE:BRDS), and Dermata Therapeutics (NASDAQ:DRMA) stock are moving today. You can find out more on these matters at the links below!
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
