BOSTON - Amwell (NYSE: AMWL), a provider of healthcare software as a service, has announced a reverse stock split of its common stock, expected to take effect on July 10, 2024. The company's Board of Directors approved the 1-for-20 reverse stock split for its Class A, Class B, and Class C common stock after a proposal was authorized by stockholders at the annual meeting on June 18, 2024.
The reverse stock split aims to regain compliance with the New York Stock Exchange's (NYSE) minimum average closing price requirement of $1.00. Amwell's Class A common stock will begin trading on a split-adjusted basis on the NYSE from July 11, 2024, under the unchanged ticker symbol AMWL.
According to Amwell CFO Robert Shepardson, the move is expected to attract a broader investor base while maintaining market capitalization levels. Post-split, the number of issued and outstanding shares of Class A common stock will be reduced from approximately 266.2 million to about 13.3 million.
Similar reductions will apply to Class B and Class C stock, with proportional adjustments to outstanding options, warrants, and equity incentive plans. No fractional shares will be issued; instead, shareholders will receive a cash payment for any fractional share entitlements.
The par value of the common stock will remain at $0.01 per share following the reverse split. Further details on the reverse split are available in Amwell's definitive proxy statement filed with the U.S. Securities and Exchange Commission on April 26, 2024.
Amwell, with its hybrid care enablement platform, connects providers, payers, patients, and innovators, aiming to improve access to quality care. The company supports a range of digital health needs and serves over 50 health plans, representing more than 100 million covered lives, and numerous large health systems.
This news is based on a press release statement and reflects the company's current plans regarding the reverse stock split.
In other recent news, American Well Corp, also known as Amwell, experienced some significant developments. The company's shareholders approved several key proposals, including the election of directors, ratification of the company's independent auditor, executive compensation, and a reverse stock split. This indicates strong shareholder support for the company's board of directors and strategic decisions.
Amwell reported a 7% decline in total revenue to $59.5 million for the first quarter of 2024. Despite this, the company anticipates a shift towards subscription software, which is projected to drive gross margin expansion. The company also forecasts revenue growth and improved adjusted EBITDA for 2025.
Investment firm Piper Sandler maintained a neutral stance on Amwell, emphasizing the need for stabilization in subscription revenue and clearer signs of the company's projected return to double-digit growth in 2025. This stance reflects a cautious approach, requiring further evidence of Amwell's financial performance and growth trajectory.
There have been changes in the company's leadership structure, with co-founder Roy Schoenberg transitioning from his dual role as president and co-CEO to become the Executive Vice Chairman of the company's Board of Directors.
His brother, Ido Schoenberg, will take over as the sole Chief Executive Officer. This change aligns with Amwell’s mission to expand the reach and impact of its technology in the healthcare industry.
These are recent developments in the company's ongoing efforts to expand its presence within the healthcare solutions sector, particularly in behavioral health. The company's executive and product management teams have been actively showcasing their latest offerings to investors.
InvestingPro Insights
Amwell's decision to undergo a reverse stock split reflects its efforts to navigate through a challenging financial landscape, as evidenced by the recent data and analysis from InvestingPro. As of the last twelve months as of Q1 2024, Amwell holds a market capitalization of $111.26 million. The company's performance metrics show a revenue decline of 8.08% during the same period, highlighting the difficulties it faces in growing its top line.
InvestingPro Tips for Amwell indicate that the company holds more cash than debt on its balance sheet, which could provide some financial flexibility. However, another tip points out that Amwell is quickly burning through cash, which could raise concerns about its liquidity and long-term financial stability.
Moreover, analysts do not expect the company to be profitable this year, and the valuation implies a poor free cash flow yield. These factors are critical for investors to consider, especially in light of the reverse stock split aimed at boosting the stock price above the NYSE's minimum requirement.
InvestingPro offers a comprehensive range of tips for Amwell, with a total of 11 additional tips available for investors seeking deeper insights. These include observations on the company's stock performance, such as trading near its 52-week low and significant price declines over the past year. For those interested in a more in-depth analysis, InvestingPro's full suite of tips can be found at https://www.investing.com/pro/AMWL.
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