Farmmi (NASDAQ:FAMI) stock is sliding on Monday after the Chinese agricultural products company announced a reverse stock split.
That reverse stock split goes into effect today and has the company consolidating eight shares of FAMI stock into a single share. Doing so reduces the total number of outstanding shares from 47,470,672 to about 5,933,834.
Investors will note that shares of FAMI stock will continue to trade on the Nasdaq Capital Market after the reverse split. They will also still use the FAMI stock ticker. However, the company’s shares will switch to the “G33277131” CUSIP Number.
What’s Behind the FAMI Reverse Stock Split?
Farmmi notes that it’s enacting this reverse stock split as a way to increase the price of its shares. The company is taking this action to avoid delisting. Prior to the reverse split, the company’s shares were trading well below the $1 minimum bid price.
When a company’s stock remains below the minimum bid price for too long, it receives a warning from the exchange. This gives them a period of time to fix the deficiency to avoid delisting. Oftentimes, companies will undergo reverse stock splits like what FAMI has to boost their share price.
FAMI stock is down 3.9% as of Monday morning.
There’s even more stock market news worth reading about down below!
We’re offering up all of the hottest stock market news traders need to read about on Monday! That includes what’s going on with shares of MicroAlgo (NASDAQ:MLGO) stock, Biophytis (NASDAQ:BPTS) stock and FaZe (NASDAQ:FAZE) stock today. All of that news is ready to go at the following links!
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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.
