Nutex Health (NASDAQ:NUTX) stock is dropping on Friday after the company announced plans for a reverse split of its shares.
Nutex Health intends to enact a 1-for-15 reverse stock split before markets open on April 10. Shareholders approved the reverse stock split in a meeting last year, allowing the ratio to range from 1-for-2 to 1-for-15.
The reverse stock split will result in every 15 shares of NUTX stock being consolidated into a single share. That will drop the number of NUTX shares from 745 million shares to roughly 50 million units. Its outstanding warrants and stock options will also be adjusted.
Nutex Health notes that shares of NUTX will continue to trade under that ticker after the reverse split. However, they will switch over to the new 67079U207 CUSIP number.
What’s Behind the NUTX Reverse Stock Split?
The reverse stock split for NUTX stock is likely to help the company avoid delisting. When markets closed on Thursday its shares were only trading for about 8 cents. That’s well below the $1 minimum required to remain on the Nasdaq Exchange.
It’s worth noting that Nutex Health was already warned of a potential delisting last year. The company was granted a 180-day extension to regain compliance. The final date for it to do so is May 20, 2024.
NUTX stock is down 12.9% as of Friday morning as some 5.6 million shares trade. The company’s daily average trading volume is below that at 1.9 million shares.
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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.
