This Meme Stock Just Did a Huge Reverse Stock Split
Retail investors often see stock splits as good news, as these shares become more affordable post-split. Not surprisingly, the announcement usually is accompanied by an immediate rally in the stock price. Reverse stock splits, however, have the opposite connotation, as companies usually deploy those moves to stay listed on exchanges that usually have minimum listing prices. When their share prices fall below the stipulated threshold, management opts for a reverse split. And usually, there's good reason the stock is at such a low price -- the business isn't doing well.
Meme stock Mind Medicine (NASDAQ: MNMD) recently conducted a reverse stock split. It has lost more than 70% of its value over the past year (the S&P 500 is down just 13% during this period) and consolidating its shares will ensure its continued listing on the Nasdaq Stock Market for the time being.
Last month, Mind Medicine consolidated its shares on a 1-for-15 basis. It accomplished its goal of getting the stock to up over a $1 in order to satisfy the Nasdaq's minimum bid price requirement. Last week, the psychedelics stock was trading at more than $11; it would need to crash more than 90% from where it is now for it to breach the $1 price point again.
Source Fool.com
