MIAMI - Dolphin Entertainment , Inc. (NASDAQ:DLPN), a prominent player in the entertainment marketing and premium content production industry, has declared a 1-for-2 reverse stock split. The action, scheduled to take effect on Wednesday, October 16, 2024, is aimed at meeting NASDAQ's minimum bid price requirement for continued listing.
Upon the split's activation, each pair of existing shares will be consolidated into a single share. This maneuver is set to reduce Dolphin Entertainment's outstanding common stock from roughly 22.2 million to about 11.1 million shares. The company's common stock will commence trading on a split-adjusted basis when the market opens on October 16, 2024, under the new CUSIP number 25686H 308.
The reverse split is part of Dolphin Entertainment's strategy to ensure compliance with NASDAQ's $1.00 minimum bid price rule and to increase the number of authorized shares available for future business and financial endeavors. Shareholders will not receive fractional shares in the process. Instead, they will be issued one whole share for any fractional share they would have obtained due to the reverse split.
Nevada Agency and Transfer Company, the transfer agent for Dolphin Entertainment, will guide shareholders through the exchange process. Shareholders with shares in electronic format at their brokerage firms need not take any action, as the changes will be automatically updated in their accounts.
This corporate move is based on a press release statement from Dolphin Entertainment, Inc., which has expanded from its initial focus on television, digital, and feature film production to include divisions like Dolphin Marketing and Dolphin Ventures. These newer branches handle public relations, influencer marketing, branding, and the development of innovative products and events in collaboration with high-profile partners.
The reverse stock split is a critical step in the company's ongoing efforts to maintain its listing on The NASDAQ Capital Market and to position itself for potential future opportunities.
In other recent news, Dolphin Entertainment has made several significant developments. The company reported a record-breaking second-quarter revenue of $11.4 million, a 4% increase year-over-year, contributing to a first-half revenue of $26.6 million. Despite an adjusted operating loss of $100,000 for the quarter, Dolphin Entertainment achieved a positive adjusted operating income of $900,000 for the first half of the year.
The company has also amended its preferred stock terms, increasing the number of votes per share of common stock the Series C is convertible into from five to ten votes per share. This amendment was approved by shareholders alongside the election of seven directors to the board, the ratification of Grant Thornton LLP as the company's independent accounting firm, and the approval of a reverse stock split.
Dolphin Entertainment's recent achievements include the acquisition of Elle Communications and the launch of the Staple Gin product. Maxim Group adjusted the company's price target from $6.00 to $4.00, while maintaining a Buy rating on the stock. The company also announced the appointment of Hilarie Bass, a distinguished corporate advisor, to its Board of Directors.
In future plans, Dolphin Entertainment is eyeing expansion into the sports industry and live events, which are expected to enhance operational capabilities and create new revenue streams. According to Maxim Group, upcoming movie and product launches, plans for owned and co-owned live events, and the launch of a sports company could be potential catalysts for future growth.
InvestingPro Insights
Dolphin Entertainment's decision to implement a reverse stock split comes at a time when the company faces significant financial challenges. According to InvestingPro data, the company's market capitalization stands at a modest $13.86 million, reflecting its current struggles in the market.
InvestingPro Tips highlight that Dolphin Entertainment "operates with a significant debt burden" and is "not profitable over the last twelve months." These factors likely contribute to the need for the reverse stock split to maintain NASDAQ listing compliance.
Despite these challenges, the company boasts "impressive gross profit margins," with InvestingPro data showing a gross profit margin of 93.92% for the last twelve months as of Q2 2024. This suggests that while Dolphin Entertainment faces profitability issues, it maintains strong pricing power for its services.
The company's stock performance has been notably weak, with InvestingPro data indicating a one-year price total return of -66.27% as of the latest available data. This aligns with the InvestingPro Tip that the "stock price movements are quite volatile" and has "fallen significantly over the last year."
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Dolphin Entertainment, providing deeper insights into the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.