Ault Alliance (NYSEMKT:AULT) stock is falling on Wednesday after the company concluded its annual meeting.
Investors aren’t reacting positively to results from the company’s annual meeting. During that, the company approved a 1-for-300 reverse stock split for shares of AULT. This will see the split-adjusted stock starting trading when markets open tomorrow.
The company notes that this will result in every 300 shares of AULT stock being consolidated into a single share. That will result in its outstanding shares dropping from 415,746,694 to 1,385,822 shares. The company’s options, warrants, and other convertible or exercisable securities will undergo a similar adjustment.
What This Means for AULT Stock
Technically, a reverse stock split doesn’t affect the value of AULT stock. However, investors typically don’t react well to news of a split. It can harm investor confidence as companies often undergo splits to boost prices for various reasons. That can include adjusting the price of the stock to avoid volatility or regaining compliance with listing rules.
News of the reverse stock split has AULT shares seeing decent trading early on Wednesday. This has some 1.9 million shares of the stock changing hands. To put that in perspective, the company’s daily average trading volume is around 7.2 million shares.
AULT stock is down 9.7% as of Wednesday morning.
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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.