In a move to consolidate its shares, Eightco Holdings Inc. (NASDAQ:OCTO), a Delaware-based short-term business credit institution, has announced a reverse stock split of its common stock at a ratio of 1-for-5. The decision was approved by shareholders during a special meeting held on August 8, 2024.
The reverse stock split was voted on as a single proposal and received significant support, with 5,205,782 votes in favor, 504,465 against, and 15,294 abstentions. As a result of the reverse stock split, every five shares of issued and outstanding common stock will be combined into one share, without any change in the par value per share.
This action has reduced the number of outstanding shares from approximately 8.9 million to around 1.75 million, subject to adjustments for fractional shares, which will not be issued. Instead, stockholders who would have received fractional shares will be compensated with cash payments.
The company filed an amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware on the same day as the meeting to effectuate the reverse stock split. Trading on a reverse stock split-adjusted basis on the Nasdaq will commence on August 16, 2024, under the new CUSIP number 22890A302.
The reverse stock split is expected to increase the per-share trading price of Eightco Holdings' common stock, which may improve marketability and facilitate its trading. For further details, the company has referred to its definitive proxy statement filed with the SEC on July 16, 2024.
This news is based on information from a press release statement and the recent 8-K filing by Eightco Holdings Inc. with the U.S. Securities and Exchange Commission.
InvestingPro Insights
In light of Eightco Holdings Inc.'s recent reverse stock split, a glance at the company's financial health and stock performance using InvestingPro data could provide investors with a clearer picture. As of the last twelve months leading into Q1 2024, Eightco's market capitalization stands at a modest $2.43 million.
Despite a notable revenue growth of 56.91%, the company's gross profit margin remains low at 12.4%, reflecting one of the challenges highlighted by InvestingPro Tips. Moreover, the stock has experienced significant volatility, with a 1-month price total return showing a steep decline of -45.69%, and a 6-month price total return of -57.39%, underscoring the stock's recent poor performance.
InvestingPro Tips suggest that Eightco operates under a significant debt burden and is quickly burning through cash, which could be concerning factors for potential investors. Moreover, the company's short-term obligations exceed its liquid assets, indicating potential liquidity risks.
While the reverse stock split aims to enhance marketability and trading, these financial indicators and the fact that the stock price is currently at only 16.95% of its 52-week high suggest that investors should proceed with caution. For those considering a deeper analysis, there are over 13 additional InvestingPro Tips available, which can offer further insights into Eightco Holdings' investment potential.
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